7 Steps To Wealth: Protect

7 Steps To Wealth

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Welcome to the 7 Steps to Wealth. You’re on Step Seven, Protect.

STEP SEVEN: PROTECT

Once you’ve earned it, saved it, invested it, and grown it, there’s one thing left to do: Protect your wealth.

You’ve made it to the final step of the 7 Steps to Wealth! What a ride. In fact, it’s a ride you might be on for a while, because there are some steps you’ll have to revisit, and there are some steps that truly never end. (That’s a good thing.)

At this point, you’ve decided to be rich. In fact, you’ve planned for it. You’ve become more confident in speaking about money. You’re regularly flexing your “ask” muscles. You’re earning. You’re investing.

And now, it’s time to make sure you’re protecting everything you’ve built so far—and what you’ll continue to build in the future.

It’s really easy to ignore this step. Believe me, I get it: It’s much more fun to earn and invest than it is to work with lawyers.

And… I can’t tell you how sad it makes me when people sit in my office with tears and tissues when they find they’ve lost what they built.

Before I preach about being diligent in your estate planning, I’m going to tell you a real life story:

Story time!

A man and a woman I know got divorced. They have kids together. So, of course, they have life insurance. In the confusion and upset of the divorce, no one ever reviewed their policy beneficiaries. (This is something my team and I always do for our clients; unfortunately this couple wasn’t working with us.)

They both ended up getting remarried. The woman even had another child with her new husband. Tragically, she was killed in a car accident. The life insurance company said, guess what? Her ex-husband is the beneficiary on the insurance policy.

Her ex-husband received $2 million. The new dad? Nada.

It would have taken 10 minutes to update the beneficiaries on that policy, and nobody ever did it. It’s a big deal.

Let me be clear: I do not sell insurance. In fact, I don’t sell anything. As a fiduciary, I do advise on how to best protect your assets, and that means:

  • If you have kids, you should have life insurance and an estate plan. 
  • If you drive, you should have auto insurance. 
  • If you have a body, you should have health insurance. 
  • If you rent, you need renter’s insurance. 
  • If you own your home, you need homeowner’s insurance. 
  • If you own real estate or have significant investment balances—especially after-tax assets—you should have an estate plan, including a will and a revocable living trust. 

Again, I know this isn’t the fun stuff… and, yes, I’m recommending things I don’t sell, because as a fiduciary advisor, it’s my job to help you make the best decisions for your long-term wealth. 

The majority of heartbreak stories I can share come down to people not wanting to pay for insurance, not following their advisor’s advice, or not paying attention to the details. 

Let me illustrate with another real life story…

Story time!

A client of mine lost both her parents in the last several years, her mother first and then her father. The second death was very unexpected, and she’s totally devastated.

She always knew that she would inherit their estate at some point. Her father had even included her in meetings with their family attorney.

After her father passed, things got much worse for her when she realized the only copy of the estate plan she could find was unsigned and unnotarized. (People always think their attorney keeps a copy of their legal documents, but that’s not something you can count on. Attorneys age, just like you do. They die. They go out of business, and sometimes, they’re just not good record keepers.)

In this case, she had to have the attorney subpoenaed. That attorney claims she can’t find the documents. Now, my client is in probate court. It’s really impacted her work, because handling this issue is basically a full-time job, and she’s had to essentially become an expert on legal topics.

Her parents wanted their estate to be passed directly to her, but it can’t happen because they didn’t get her the right copy of the trust document.

Instead of being able to take control of the money that her parents wanted her to have, she and her husband are out thousands of dollars in legal fees. She can’t even get to her parent’s bank account to pay the mortgage or the utilities on the home that they owned for many years. Every time I speak to her, she’s in tears. It’s added massive stress and anxiety to her life.

I don’t tell you these stories to break your heart. I tell you as a caution: Taking just 10 minutes, or even a few hours, to get your affairs in order can save both you and your family months and years of stress, down the line.

Imagine if my client’s parents had dotted their i’s and crossed their t’s and were working with a team of professionals. She and her husband could be doing real things with that money, things that would have a much more positive impact on their daily life and her parents’ legacy.

We have working checklists with all of our clients at HWM. Depending on their circumstances—and their goals—we continuously review these checklists to make sure everything is kept current. 

In the case of my client’s parents, that trust document would have been signed and notarized. Everyone involved would have had a copy, including her parents’ attorney and advisors. The IRA beneficiaries would have been reviewed and updated, and the family home would have been cleanly titled to the trust. 

Protecting your wealth can seem like a headache, but I promise you this: It is the kindest, most loving thing you can do for yourself, your family, and loved ones.

On that note: It’s time we wrap this 7 Steps to Wealth journey up! Join me on the next page to do just that.

Wait! Have you downloaded your copy of the official 7 Steps to Wealth guide yet?

You’ve done yourself a huge favor by reading through this series, where we talked about deciding, planning, speaking, asking, earning, investing, and protecting when it comes to your wealth.

And, a reminder: This isn’t a linear journey. You will need to revisit steps, and that’s not a bad thing. Get the guide, keep it in an easily accessible place, and know that wealth requires work, and that work pays off.

Download your copy of The 7 Steps to Wealth official guide 💸

Decide
Plan
Speak
Ask
Earn
Invest
Protect
All investing involves risk, including the potential loss of principal. There is no guarantee that any investment plan or strategy will be successful. Advisory services provided by Hendershott Wealth Management, LLC (“HWM”), an investment advisor registered with the U.S. Securities and Exchange Commision. Registration does not imply a certain level of skill or training.

All written content in this article is for information purposes only. Opinions expressed herein are solely those of HWM, unless otherwise specifically cited. Material presented is believed to be from reliable sources and no representations are made by our firm as to another parties’ informational accuracy or completeness. All information or ideas provided should be discussed in detail with an advisor, accountant or legal counsel prior to implementation.
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