"The farther behind I leave the past, the closer I am to forging my own character." -Isabelle Eberhardt

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Even though all the news media are telling us how HARD things are out there, there are still regular people who are quietly but quickly moving forward with their financial goals.

And, sometimes, they get a little help.

This week I'm going to address what you should do if and when you receive some sort of sudden financial blessing -- and what not to do.

But, before I get there, I wanted to give a few quick guidelines for the MANY people who are beginning to stream through our tax offices these next few weeks, as the tax deadline begins to approach (!)...

1) Understand the bounds of our (admittedly awe-inspiring) powers: As much as I would LOVE to be able to change the tax law , unfortunately ... I can't. So yes -- there are sometimes situations I run across with clients where the tax law pretty much stinks. But we can't change that for you. All I can do in that circumstance is to help you get through it with maximum assets intact.

2) We like thoroughness. It's one of the reasons I send out the list of things you'll need to have handy for your tax prep process. Yep -- it's long. Tedious? Sometimes. But I actually can't magically create receipts or tax forms from thin air. So bring all that you can -- I'll wade through it with you.

3) Lying to us is like lying to your lawyer. It's only happened once or twice in my career, but when a client hides stuff from me ...  well, shoot -- what's the point of that? All I'm going to do is to HELP you by leveraging every available deduction, credit and tax provision I possibly can to help you keep all that you deserve to.

So help me help you. Don't fight your best advocate.

Phew! Let's move on to something a little more fun to think about, shall we?

Lawrence J. Danny's
"Real World" Personal Strategy

Keeping A Windfall From Ruining You
According to recent data from the Federal Reserve (what do they NOT keep track of??), more than nine million households in the U.S. reported getting an inheritance of at least $100,000. And there is other data which suggests that baby boomers stand to receive over $8 trillion in inheritance over the next few decades.

But sometimes such "blessings" end up as curses to those who aren't prepared.

Consider former baseball star Lenny Dykstra, who recently filed for bankruptcy in 2009 after once having a net worth estimated at $58 million. And, of course, the stories of lottery winners has become so pervasive that Hollywood has even begun using it as regular plot device on TV.

So -- a few quick essentials for you to consider, should you find yourself on the receiving end of a small fortune. These aren't pieces of investment advice, per se, but rather some guidelines which will help you emotionally handle the new situation:

1) Move slowly at first.
Take some time to let it sink in and get through the emotion of it all. Most of the bad decisions made with sudden wealth happen in the first couple months. So lock it up in a low-yield savings account for three months, proceed as normal, and use that time productively.

Do this during that time...
2) Circle back to your life goals, and evaluate how the money will help you achieve them. Just because you've suddenly been given some cushion, doesn't mean your life has to radically change. It might get easier ... but if you leave behind the goals you created BEFORE this windfall, it's more likely that it will get harder.

3) Find a disinterested advisor to be a buffer. It's often best to work with someone who already has experienced handling the finances for people of means. That way they, too, won't get caught up in the emotion of it. Let them be your "go to" gatekeeper for your greedy cousin or high school friend with those "can't miss" investment ideas.

4) Immediately, give a portion of it away. I've written about this dynamic before, but there's something special which happens inside your mind when you give away your money: it loses its grip on you, ever so slowly. And, far from turning you into a profligate (and unwise) giver, what can happen is that you aren't as affected in your character by the sudden influx of funds. Which means that you don't become more flashy, nor do you become a tightwad.

5) And, of course, assess your tax strategy. Coming from me, this should be a no-brainer, but every gift has a variety of ways by which it can affect your taxes. And many of the moves which we can help you make can protect you greatly.

So let me help you in all of these areas and many more ... you won't regret it! Give me a call next Monday since I won't be around until then.: (818) 632-2053

Warmly,


Lawrence J. Danny, CPA
www.cpaformerirsagent.com