I recently went through some challenging and life-changing moments in terms of my health. At the time, I found myself relating these events to the way I occasionally see things happen with clients in our tax practice. In both situations, I realized, it’s easy to ignore warning signs or potential problems. Yet taking the time to consult with a team of experts—whether it’s your doctors or your financial advisors—can help you prevent a minor issue from developing into a full-blown crisis.
Stuck on Autopilot
At Singer Burke, many of our tax clients go through the year earning their normal sources of income and paying their normal expenses without a worry in the world. I was doing the same thing when it came to my health. I was going about my normal daily routine of enjoying life by working, playing golf, going out to dinners with friends and family, and spending time with my grandchildren. I wasn’t paying attention to calories or my cholesterol intake.
I would go for annual physicals, similar to our clients who send their annual information to our office so that we can prepare their tax returns. But I was barely paying attention because everything seemed routine. My physicals showed acceptable scores, so I did not change my habits. That turned out to be a mistake.
Position Yourself for a Hole-in-One
Just as I assumed that everything was OK with my health, I have seen people assume that everything is OK with their finances—until suddenly it’s not. But when you take the time to consult with your team of advisors on a regular basis, you can identify potential problems and take a proactive approach to solving them.
For example, I always tell clients to call me before they get involved in a transaction that may have negative tax repercussions. That gives us an opportunity to set them up to achieve the best results. Quite often, however, things just happen, and we only find out after the ink is already dry. A special deal comes along and there seems to be no time for planning. Or people rely only on their agents or attorneys without checking out the tax consequences. In short, they abandon the full-team approach.
Whether it’s your finances or your health, having a whole team to support you generally leads to better results. In my case, I was taking my cholesterol-lowering medications and believing that alone would protect me from the evils of my poor eating habits and my poor exercise routines. I finally got wise with the expert assistance of a wonderful internist who believes in working as a team player. I was advised to see a cardiologist to further explore my situation. I had no outward signs, but my failure to be proactive with my health had paved the way for a situation where something bad could just possibly happen. Eventually, we determined I should go in for further testing at the hospital and they inserted three stents into my heart. Well, I came out feeling great, and the following weekend I got a hole-in-one at El Caballero Country Club on the sixth hole. If that doesn’t prove the benefits of being proactive, I don’t know what does.
The same thing can happen for tax clients. If they consult their entire team of advisors before a disaster hits (like an unexpected audit or large tax bill), our clients can come out of the situation with spectacular results, just like getting a hole-in-one.