“Paula, my husband and I came into a small windfall of money and we want to know what we should do with it. Should we pay off our house, invest the money, purchase a rental property, or pay off our student debt? Our friends and family are giving us competing advice.”
I am an avid podcast listener while driving. This question came from a listener of “Afford Anything” hosted by Paula Pant who shared the mic that day with her co-host, Joe Saul-Sehy, a former financial advisor.
What I love about these particular podcast hosts is that they understand there is no one-size-fits-all answer to the listener’s question.
As with so much in life, it depends.
Photo from Tbilisi, the capital of Georgia from "he who must not be named"
What is this listener’s long-term goals? Are they planning to start a family soon? Do they have enough saved for their kids’ college? Do they have credit card debt? What is the interest rate on their home mortgage? Does it bother them to have debt? Do they sleep better at night knowing they have a comfortable nest egg in the bank?
The “right” answer for this listener will be different than the “right” answer for you or for me.
When it comes down to it, the listener really doesn’t care per se about where she parks the money but rather what that money will do for her life.
I encounter a similar dilemma every day with clients that I meet with who oftentimes want to learn more about living trusts, ladybird deeds, and other particular estate planning tools that a friend or neighbor tells them that they “absolutely must have!”
Or, clients might be hesitant to disclose information about their assets prior to our initial meeting thinking all they want me to do is to redraft their simple Will (a Will is another estate planning tool).
Folks sometimes forget (or do not yet understand) that Wiils, trusts, deeds, beneficiary forms, etc., are only TOOLS available in our estate planning arsenal. These tools in and of themselves do not necessarily contribute to the end result they are trying to accomplish.
Take a carpenter for example. He may think a hammer is the best thing since sliced bread but will a hammer alone create a beautiful piece of furniture? Of course not, he needs other tools to get the job done like wood, saws, nails or glue, sandpaper, varnish, etc.
Or, maybe the carpenter is whittling a piece of wood into a figurine and doesn’t need a hammer at all.
The carpenter starts with the end in mind—what is he trying to create—before choosing the best tools to get the job done.
Similarly, at My Pink Lawyer®, we start with the end in mind too. What exactly is the client trying to accomplish with her estate planning? Is it to protect her minor children? Is it to retitle her assets as quickly and easily as possible to her loved ones when she dies? Does she own real estate or are all of her assets already liquid?
One does not hire an estate planning specialist to simply draft a document, such as a Will or a Trust. One hires an estate planning attorney to create an overall plan using a variety of possible estate planning tools to get the job done.
A living trust might be “overkill” for some clients’ situations and planning goals.
And believe it or not, a Will might have zero effect on the transfer of one’s assets post-death.
That’s where we step in to recommend the planning tools that we think will create the end result you are seeking while at the same time, keeping the plan as simple, practical, and cost-effective as possible.
To learn whether living trusts or ladybird deeds are appropriate for your particular situation, you can schedule an estate planning consultation with me to discuss it further: 850-439-1191
Kristen “Estate Planning Carpenter for Almost Three Decades” Marks