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5 Situations that Demand the Expertise of a Financial Advisor


situations-that-demand-expertise-financial-advisor-615.jpgHow do you know when you can attempt a job yourself or when you should call an expert? As with auto or home repair projects, some jobs are best left to the experts, like different levels of financial management tasks. Here are five situations where it may be wise to get guidance from a financial advisor:

1. You're selling or buying a business

Selling or buying a business can lead to some tricky finances. A financial advisor will help you navigate the complexities:

When selling When buying

Avoid emotional decisions

Minimize taxes

Invest proceeds from the sale

Create a retirement income stream

Create business plans

Establish business succession plan

Lead financial team (attorney, accountant, insurance agent, etc.)

2. You need to finance children's college expenses

With college tuition costs constantly on the rise, paying for your kids' college expenses gets more difficult every year. A financial advisor can help you decide on and fund a college savings plan, such as a 529 plan. In addition to the confidence and security of knowing you're steadily building college savings for your child, with a 529 plan, your financial advisor will help you save on taxes and and stay in control over exactly how your savings are spent.

3. You need to finance your own or a parent's old-age care

As you and/or your parents age, it's inevitable that you'll need to plan for long-term care and elder care expenses. The going rate for this type of care can be substantial—$3,823 to $6,150 per month for an assisted living or nursing home facility! Obviously, those costs can add up quickly. Fortunately, a financial advisor can help you:

  • Start saving for in-home, hospital, assisted living, or nursing home care

  • Purchase long-term care insurance to help with in-home aide, adult day care, assisted living, nursing home, memory care, and hospice charges

4. You inherited or otherwise came into a large sum of money

Unfortunately, most of us do not have much experience in receiving large sums of cash. Therefore, we usually don't know the right actions to take if we inherit a sum, receive a large work bonus, or win substantial prize money. A financial advisor can help tackle your to-do list and help you:

  • Minimize expenses that might come with the newly acquired sum, such as taxes

  • Hire and manage other necessary experts, such as an accountant and attorney, who will safeguard your funds with asset protection strategies

  • Pay debts and other obligations

  • Protect and invest your windfall

  • Insure your new assets, set up beneficiaries, and update your will to distribute your estate as you wish

  • Field requests for donations and handouts, allowing donations only according to your directions

5. You're considering how to distribute your estate

Once you've accumulated a significant amount of assets, you don't want to leave them to chance. A financial advisor will make sure your will is up to date and establish a plan for dividing your estate according to your listed beneficiaries and your stated wishes. Your financial advisor will prompt you to revisit your estate plan every few years to make adjustments as your family and assets change.

Doing work yourself and pocketing the difference is a great way to save money and build wealth. However, some tasks require the help of an expert so you don't get in over your head. When you find yourself in unfamiliar and involved financial territory, call on a financial advisor for guidance. 

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