Blog Debut!
Are You In Financial Transition?
I’m a financial adviser and CPA by trade.
Many years ago an associate, now deceased, lived like he would never leave this world. He had a residential construction business and significant real estate holdings, but did not maintain good records or clear title to deeds (i.e. he might have his ex-wife or one of his sons on a deed, etc). He also did not always pay his taxes on time, so it was not uncommon to have to negotiate a release of a lien on a property he might wish to sell.
Unfortunately, he was diagnosed with cancer and died within 8 months. Since he did not give power of attorney to his grown children and insisted on staying in control until the last few months of his life, it was very difficult to clear up the titles prior to his death. Eventually, a number of the properties had to be sold “fire sale” to handle loan pay-offs, estate taxes, etc.
What Should You Do When in Financial Transition?
Whether you’re going through a long-term illness, separation, forced/early retirement, job change or shift to the self-employment arena, ask yourself the following key questions:
- Will this change require me to change my spending habits?
- Who specifically will be affected? Will they accept/cooperate with this change?
- Will this event/circumstance cause me to have to re-tool to become more marketable or to network within a different circle?
- How will others, not directly involved, react? Will they have influence over those close to me? Will I have to build a new team?
- Do I have a written plan of how I will address key changes?
- Do I have enough money to handle these changes (i.e. will I have to borrow or cash out long-term investments)
- Do I know my net worth and current cash flow needs (i.e. when is the last time I wrote out a personal spending plan)?
Of course this is not a complete list, but it does provide some of the questions you will need to address immediately, if you are to assess the financial implications of your transition.
It’s been over 10 years since my associate’s passing. The estate has been resolved and the family is doing well. But my friends, don’t be like my associate. Take some action now to plan for the unknown.
Genevia Gee Fulbright, CPA is President/COO of Fulbright & Fulbright, CPA, PA, a business strategist, tax advisor and author of Make the Leap: Shift from Corporate Worker to Entrepreneur and most recent book Make the Leap: From Mom & Pop to Good Enough to Sell (Infinity Publishing). Her sound financial planning advice tips can be read regularly on www.urbanthoughtcollective.com. Visit Fulbright at www.makeleap.com.
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