Walking up Michigan Avenue in Chicago, I was thinking I should call my mother and, somewhat distracted, I reached into my pocket for my phone. That’s when a young man slammed into me – a solid, intentional body blow – and started cursing me loudly.
Instinct kicked in. I sized him up. He was about twenty years younger than me, but I was taller and heavier. My first cogent thought? “I am wearing my nicest suit and this isn’t going to be pretty.” Without hesitation, I looked him in the eye and said, “You’d better back off, pal.” Thankfully, he did and I brushed past him.
This experience was unsettling in many ways. For one, it challenged my Perpetual Present Bias: the comforting thought that life will predictably go on today, tomorrow and into the future, unmarred by any unsettling changes. Yes, I acknowledge that’s an absurd thought, but don’t we all act like we are fixtures of this place?
In general, I believe most of us think today’s good health, today’s family situation, even the current tax laws will remain constant, but change is often fast and furious. Economic shocks, health crises, natural disasters or family upheavals can flip your world in an instant.
My point isn’t to foster fear but to advocate proactive planning for your finances, your family and yourself. Chaos is costly. Successful companies know this and, thus, they plan for continuity of leadership. Apply the same thinking to your life.
Build a personal "succession plan." If you handle the family finances, designate and regularly brief a trusted advisor. This is especially critical if your spouse isn’t equipped or interested in the task. Make sure you provide that advisor with access to key documents and important contacts such as your accountant. Keep that advisor informed of any changes in your life or your family.
At the same time, review your estate plans, advance directives, beneficiary designations and asset titling regularly. Consider the liquidity of your balance sheet and the tax basis of your assets. Both of these are often overlooked. An unexpected tragedy shouldn’t leave loved ones facing financial disarray or avoidable tax bills.
As someone who helps families navigate these shifts, I’ve seen how overcoming a natural bias towards the perpetual present can turn uncertainty into confidence. Life can change in an instant – even on a routine walk up Michigan Avenue. None of us know what the next moment will bring.