There once was an old man who offered a boy either a million dollars today or a penny that would double its value each day for the next 30 days. The boy seeing the million dollars makes the easy choice and takes the cash. 30 days later the boy learns his friend was offered the same deal but took the penny and now has over 5 million.
The boy became very upset and went back to the old man and demanded to know why his friend received more than he did. After all he yelled his friend should only have some change not actual money! The old man responded that he should have listened carefully to what was offered and not simply taken the first thought that popped into his mind. He said it was easy to look at a penny and assume it could never reach a million dollars in such a short time; however, his friend spent the extra time to find out how much such a penny could actually produce if it doubled each day for 30 days. The fact is with the effects of compounding it would take nearly 29 days for the penny to catch the million dollar mark, but there in those final days all the difference was made.
Making life altering decisions on assumptions can result in outcomes we didn't anticipate or desire. Author Andy Andrews often says "you cannot believe everything you think," and he is absolutely correct.
Far too often people approach their retirement years and estates in a similar fashion as the young boy. We believe the easy answer, the common way of doing things, must be the right way. This assumption leads families into poverty, hurt feelings, or worse. While taking the extra time and money to learn the actual facts is harder.
We can only process answers with the information we have obtained over our lifetime. If we use assumptions to form facts and then use these "new" facts to make decision then we cannot complain when the outcome isn't what we anticipated. In short, life and fairness are not connected; the world will not always provide you with all the facts and answers. It is up to you to research, ask questions, and seek guidance before making important decisions.
If you need answers to your estate questions I hope you will seek help from our office.
BTW: The math comes out to one million vs. $5,368,709.12 (how many believe the one million would actually still be one million at the end of the first 30 days?)
Jason A. Waddell is a Board Certified Florida Elder Law Attorney who practices on the Panhandle of Florida.