In the career that is financial planning and especially in the public commentary that we create around it, strategies and tactics tend to dominate the conversation. After all, the reason for financial planning is to make tangible financial improvements in a client’s situation. Absent that, what’s the point? But there is another equally (more?) important side that probably doesn’t get the attention it deserves – the qualitative element of financial planning. How does your financial plan serve you? How does it reflect your values? How does it give the assets you’ve spent a lifetime accumulating meaning? How does it communicate that meaning to others? I’ve spent a lot of time thinking about this and the best explanation I can think of - and one that I hope can persuade some to pursue their own financial plan even when there seems to be no immediate urgency - is this: financial planning is love.
Think about all the things that you do as a parent or grandparent to ensure the safety and happiness and wellbeing of your children, grandchildren, and others important to you. Spending hundreds or thousands of hours reading to them, going on trips to practices and games and school and lessons, making sure there is a roof over their head and food to eat and an environment where they can develop physically, mentally, spiritually, and socially. You don’t do those things because they’re easy or because they’re fun (some are) - you do them (presumably) because you love them and view it as your responsibility as a parent or grandparent – you want to see the people you care about succeed.
When you list all those things you view as important in helping your children, you aren’t likely to exclude the financial element entirely. You’re probably saving and investing and insuring yourself to protect your family, but those things in unconnected isolation don’t make a good financial plan. A good financial plan is one in which the whole is a seamless collection of well-thought-out parts, which together should get you to – at the very least – a range of outcomes that are acceptable to you. Said more plainly – putting money in your 401(k) is different than saving a specific amount in an attempt to generate a specific income in retirement that lets you do what you want and pass on what you want. Having a will is nice, but maybe your goals could be better accomplished by re-titling assets, or adding living trusts, advanced health directives, intentionally descriptive estate documents that leave no room for your kids’ imagination or interpretation, gifting and tax-planning during your life that doesn’t just give your heirs what’s left over - it gives them the best version of it.
I’ve told so many clients, and will continue to do so, that no reasonable beneficiary should ever complain about receiving any sort of inheritance, but if you as a benefactor have a net worth or an estate of some value, what is the best reason not to make the most of it, especially if it only takes a few hours of work and review per year? I've heard various answers to this, but a couple of the underlying themes from the giving generation seem to be either that it doesn't matter because what's being given is good enough, or, in some cases, feelings that border on a desire to not do more than the bare minimum for the next generation because the parents weren't afforded the same luxury – I worked for it, they should have to do a little to earn it. That’s a difficult feeling to counter as an advisor because to some degree, it requires you to confront someone on whether their feelings are reasonable or even ‘right.’ The same is true of financial plans for younger people, long before estates hold substantial value. Being adequately insured, making sure you save even if you don’t plan on retiring young, having estate documents in place for an event that you hope is highly unlikely – those are all ways of proving that you love someone enough to do something that’s not convenient for you. Not insuring yourself well in an attempt to prevent a hypothetical future spouse from benefiting is an odd way to show the love that you have for your own spouse and kids today. This isn't only love in the future tense – a good plan is a gift to the people living alongside you right now, not just the ones who outlive you. An airtight financial plan is one of the best possible ways to show your love for your family because so much of it is designed to help someone other than yourself. What better way to show how much you love someone than to invest hours of your own time and your own dollars into making sure that when you’re long gone, your kids and grandkids are able to grieve without also being burdened by cleaning up a disorganized and scattered estate?
This isn’t about dollars – everyone’s estate and existing plan will look different both in terms of size and makeup. This is about your money reflecting your values. This is about money as a means and not an end. The amount of time you need to spend to do this well pales in comparison to the impact it can have on loved ones. Failing to do so or avoiding doing so is a message – in most cases unintentional – that easing that burden on your heirs wasn’t as high a priority as all of the other things you chose to fill that space with. I hope that your actions and your financial plan reflect something that you’re proud of and show, in no uncertain terms, how much you care for the people you’ll eventually leave behind.