ALL IN THE FAMILY

By Michael S. Wallman, Vice President / Financial Advisor
The Canseco Financial @ Raymond James Financial Services.

The 90’s have seen the further evolution of the definition of the “family.”  Demographics have forced a change in the perception of what exactly is an American family.  Single parent households, unmarried couples, individuals living alone and other alternative lifestyle arrangements are becoming the norm rather than the exception.  Each of these social units presents unique financial planning problems that do not fit into “cookie cutter” recommendations.

Single parent families face many of the same financial problems that are posed for traditional families, yet with an added level of urgency.  Disability planning for such parents is crucial because there is no live-in back-up to rely on for a source of income in the case of an event where the single parent is unable to provide.  Durable powers of attorney for property management and health care directives as well as adequate insurance coverage can be saviors in such events.  Trusts with reliable successor trustees can also be useful tools to address potential problems.  Adequate life insurance should be present to provide for future educational, child care, home and health care expenses of the children.

The financial planning challenges that confront the long-term bachelor\bachelorette are similar to those of the single parent.  Disability planning is a primary consideration.  Yet, basic estate planning is also important.  Without a will or other tool to provide direction in the distribution of a single individual’s estate, the deceased’s property will pass according to the respective state laws of intestacy.  This may be wholly opposite of the deceased’s wishes.

In the case of unmarried couples, these problems are especially prevalent.  Neither state laws of intestacy nor the Internal Revenue Code recognize or offer any benefits to “life partners.”  For example, despite the fact that local law may recognize the concept of life partners (heterosexual or not), the tax code does not provide transfer tax “marital” deductions based on these relationships.  There is no such thing as leaving all to your pseudo-spouse tax free as with traditional married couples.  Thus, life insurance can play an even greater part to meet potential estate taxes.

Further, in cases of incapacity where property and health decisions must be made, or where property is distributed away from a decedent’s immediate family, advanced financial planning can ward off upset family members.

Many unusual financial planning problems arise out of these various lifestyle situations.  Yet, the basic financial goals are the same.  Each of these groups must balance their current lifestyle and finances with their future goals and needs.  Each must invest their assets effectively to accomplish set goals.  Each needs to protect against emergencies and hardships.  Finally, each needs to decide what they want to leave behind, to whom they want to leave it, when to leave it and the most effective means of doing so.  Many traditional techniques need to be modified and adapted to achieve these goals.  Yet, eventually this boils down to adopting a systematic, detailed and individualized approach.  Such an approach, and working with experienced professionals, is essential to effective financial planning to provide for whomever you choose to call a “family.” 

For more information please call Michael @ 305-865-4300

You may find Michael online with the Canseco Financial Group @ Raymond James Financial Services at http://gayfinancialadvisors.com/Florida.htm