Author: Cynthia Sharp J.D., LL.M. (taxation)
A book in development by the ABA Solo, Small Firm and General Practice Division
CONTINUING LEGAL EDUCATION COURSE: The author customizes the presentation in accordance with the needs of the audience. The following brief description outlines potential topics. Length of Program 60 minutes - 180 minutes
“Can anybody remember when the times were not hard, and money not scarce?”
- Ralph Waldo Emerson
By and large, attorneys who have “done well” and are “living the dream” share three common characteristics: First, they are financially literate, having committed to an ongoing education with respect to investment and money management principles. Second, emotional maturity and wisdom guides them in their decision making process. Third, they seriously consider and analyze advice offered them by their financially astute mentors.
This book will serve as a resource to attorneys seeking financial literacy and security. Examples provided throughout illustrate the significance of compounded interest, tax deferred growth, the “latte factor” and much more. Readers are referred to online calculators that will prove useful in weighing their own options in many arenas. Ultimately, attorneys are encouraged to take action and take charge of their own economies!
An overview of the elements of the financial planning process. Readers are encouraged to begin the self assessment process from the outset. Organizational tools are provided along with guidelines as to their effective use.
A. Debt Management
The high cost of carrying credit card and unsecured debt is analyzed. Information regarding credit scores and credit reports is provided. Issues regarding loans between family members are discussed. Emphasis is placed on time proven strategies to become debt free.
B. Education Planning
"Education costs money, but then so does ignorance."
- Sir Claus Moser
This section comprehensively analyzes the tax benefits of Section 529 Plans, Coverdell Education Savings Accounts (ESAs), American Opportunity Tax Credit and Lifetime Learning Tax Credit. Other topics covered include: UGMA/UTMA Accounts and Loans, Scholarships and Grants.
C. Investment Vehicles
The basics of common investment options (such as mutual funds, stocks, bonds and annuities) and concepts such as the importance of diversification, asset allocation and hedging against inflation are explored. The author discusses how financial advisors are compensated, the meaning of their credentials and factors to consider in seeking their assistance. A section is devoted to various types of real estate investments including the primary residence, vacation home and investment real estate. Mortgage options are demystified.
D. Retirement Planning
While it is ideal to start saving for retirement (or “rewirement”) while young, it is never too late (for those willing to start today). This section outlines methods by which to calculate retirement needs and the importance of specifically setting attainable interim goals. The financial impact of post-retirement domicile with respect to cost of living, income, estate and gift tax liability, the availability of government benefits as well as a myriad of other legal rights is discussed. Aspects of Social Security benefits are explained. The tax benefits of qualified plans, IRAs and Roth IRAs are analyzed in detail.
INCOME PROTECTION/ASSET PRESERVATION
The role of insurance in the financial planning process is often underestimated. Topics include disability insurance, professional liability and umbrella insurance. This section also covers techniques to reduce income tax liability and lists ten common costly mistakes made by taxpayers.
LONG TERM CARE/ESTATE PLANNING
"Money is the most envied, but the least enjoyed. Health is the most enjoyed, but the least envied."
- Charles Caleb Colton
In addition to outlining the need for Basic Estate Planning Documents, this chapter covers the following: Federal estate and gift tax concepts, irrevocable and revocable trusts. special needs planning and the importance of open communication among family members on these topics. Suggestions are provided on “How to Start the Conversation”.
Significant detail is furnished with respect to qualification for the following governmental benefit programs: Medicare, Medicaid, SSI and SSD. The role of Long Term Care Insurance and Reverse Mortgages in elder care planning is discussed.
THE WAY FORWARD
The key philosophy of the book is that a prerequisite to attaining financial security is financial literacy. However, living up to one’s own financial potential also requires the willingness to take necessary action, regularly monitor progress, make adjustments and perhaps to make short term sacrifices.
Specific approaches and action plans are outlined. The personal budget process is described in detail. Forms and examples are provided. Lawyers who run their own firms will benefit from the explicit suggestions and practical guidelines designed to improve any law firm’s bottom line.
Contact Cindy at email@example.com
609 923 1017