December 26, 2002
Merry Christmas. Now it's back to reality. Life has a way of handing you important high-dollar decisions at inopportune times -- it doesn't care if you have the next four days off from work or are still struggling to assemble your toddler's new Barbie trike.
In moments like these, a financial pro may earn his fee many times over by helping you through sticky situations, such as:
- Death of a parent: You may be the executor of the estate, but is now really a good time to bone up on all the complexities involved, or to decide how to invest a substantial inheritance?
- Marriage: You've just tied the knot, and you've decided to blend your finances into one. Sure, your Schmoopy trusts you, but an independent voice in the mix might smooth the way and even point out some tax implications.
- Divorce: You've just untied the knot. It's hard enough working through all the divorce lawyers and emotional turmoil, but what about the financial implications? Do you still file taxes jointly this year? Can the stay-at-home former spouse still make an IRA contribution?
- Complex financial products: Term-life and automobile insurance are simple enough that almost anybody can effectively research and purchase them online. But what about complex products like disability and long-term care insurance?
- Buying and selling a house: The hallmark of these transactions is a sudden string of big-dollar decisions with little time to think them through. What are the cash-flow implications? Should you plow all of your savings into the down payment, or keep a little for a rainy day?
- Saving for college: It's the last day of the tax year, and you have a little money coming back. You want to make a contribution to a tax-sheltered college savings account for your kids. What are the pros and cons of all the options? Do you have to decide today?
- Estate planning: It's not just about avoiding taxes. Have you thought about who will manage the kids' inheritance should you die unexpectedly? Do you really want them controlling what's left of the life insurance payout at age 18? Should you set up a trust?
- Retirement: Your employer has hit the skids, and you're being offered an early retirement package. Should you take it? Do you have enough money to retire?
- Employee stock options: Should you exercise your employee stock options this year or next year? What are the tax implications?
There are many reasons to seek the services of a paid financial advisor. Here are 10 must-knows before hiring a pro. And for instant hands-on help, consider the services of TMF Money Advisor, where a neutral third party, well-versed in financial matters, is just a phone call away.