Couple seeks financial planning guidance
Q: I’m hoping you can help me find a tax attorney in Los Angeles who can provide guidance to my fiancé and me. We are both about to graduate from our residencies as doctors and will then get married, start our careers, and buy a house, which is a substantial purchase in Los Angeles. We want to start off on the right foot in terms of planning, so we wanted to meet with a tax attorney first and discuss investments, inheritance, insurance, etc. Can you recommend someone in Los Angeles who we could pay by the hour and who would just have our best interests in mind in terms of giving us advice? Thank you!
A: Thanks for your question. And, congratulations on all of the things you and your partner have already accomplished. It’s no small feat to get through medical school (likely with some amount of debt), start your careers and get married all at the same time. And now you want to buy a home, which you rightly point out will be a significant cost in Los Angeles (the median sales price recently topped $1 million, according to Redfin).
Doing some financial planning is a smart move. And, you’ll need some tax planning advice to be sure. It’s an important piece, especially as you build your careers and accumulate assets, but that isn’t where we’d start.
Let us explain. A tax attorney can help you plan for any tax ramifications of investments you make. But, a good financial planner will help you see the outlines of your financial lives, help you set short-term and long-term financial goals, and understand what you need to do
in order to get where you want to go and to become a homeowner.
Depending on the type of practice they’ve built, a Certified Financial Planner (CFP) or a Registered Investment Advisor (RIA) can help you build a financial plan that will deliver benefits now and in the future.
Given that you both have significant earning potential, getting a financial team in place is helpful. But a tax attorney isn’t going to be the right person to advise you on your home purchase — unless you’re planning to do something special with it. What you might need is an estate attorney, who can advise you on legal issues relating to your work as medical practitioners and
whether you might need to protect your assets from liability down the road.
What we’d suggest for you is building a team of professionals who can help advise you as you, your businesses, and your family grow. One team would help you buy a home or any commercial or investment real estate. Another team would focus on your investment assets and long-term asset growth.
When it comes to buying a home, you’ll likely need a real estate agent, mortgage broker or lender, a professional home inspector and possibly a real estate attorney. (Hiring a real estate attorney for the purchase of a home is location-specific. They are not typically used in California, unless
you’re buying an extremely expensive or legally entangled property, while they are quite common in Illinois and New York.) While hiring a tax expert is recommended for any commercial or investment real estate purchase, this is the time to find a good certified public accountant (CPA) or enrolled agent (EA) who can help manage federal and state income taxes.
As your assets begin to grow, you’ll want to talk with a CFP or RIA, who can work with you to design a plan that will protect you and give you a high chance of achieving your longerterm goals, including retirement. You will also likely need an insurance agent. Your CFP or RIA can
probably recommend a few people with whom they work closely, including an estate attorney (who can help guide you on inheritances as well as trusts) and an accountant.
Should you decide to strike out on your own and build your own practices, you’ll need additional professional advice from attorneys with different types of expertise, insurance practitioners, business managers, and perhaps technologists, who can keep the back office running smoothly.
At some point, you may need additional guidance from a tax attorney, who can guide you through high-level planning, and may be able to help you take advantage of the deductions, credits and exemptions available to those with an auspicious level of assets. They’ll also be able to help if you get into a tax dispute with the IRS. They handle tax litigation and can be helpful in international tax planning. Some have accounting and legal degrees.
As your lives get more complicated, there will be experts who can step up and help. But for now, as you’re just beginning, focus on pulling together your home buying team. Good luck.