You Could Have Been a Millionaire!

Years ago a group of tobacco executives appeared before a congressional hearing, placed their left hand on the Bible, raised their right hand and swore that tobacco products were neither addictive nor harmful to your health. Of course everyone including smokers knew this was a big lie. Unfortunately, many young people still believe that smoking cigarettes is 'cool' and makes them feel (and look) like adults. That is --until their teeth turn yellow, they figure out people are keeping their distance because of bad breath and they realize that they can no longer control the habit. I remember once being in a quick mart and having someone come in and order a carton of cigarettes. He was on oxygen and toting an oxygen bottle at the time. One of my associates who quit smoking five years ago based on my challenge (with a monetary reward!) said that she occasionally still has urges to smoke a cigarette, “As long as her leg!” Tobacco is as addictive as any drug.

We all know that smoking is a universally bad idea, but did you ever stop to think about the true costs of smoking? Is it nothing more than the cost of a $5 pack of cigarettes per day? Here’s a partial lists:
A twenty-year-old who gave up a $5 per day habit and invested the money at 7.5% would have $1 million by age 70. Reverse thinking would suggest that continuing smoking costs this person a million dollars over their lifetime. And this assumes the cost of cigarettes stays constant.
Research indicates that smokers on average die nineteen years sooner than non-smokers.
In Alabama, research suggests that for every pack of cigarettes sold, and additional dollar will be spent on healthcare treatment related to tobacco use.
There are fewer job opportunities for smokers as many employers avoid hiring smokers for a number of reasons. First, smokers tend to need to take ‘smoking breaks’ throughout the workday which is both unproductive and unfair to non-smoker employees. Second, smokers tend to have greater health related illnesses causing greater absenteeism and higher healthcare costs.
Life insurance premiums are much higher for smokers than for non-smokers. For example, a $1 million 20-year term policy on a 30-year old smoker cost $1,500 versus $435 per year for a non-smoker.

These are just some of the personal costs of smoking. There are also the health-related side effects to unborn children as well as people exposed to second hand smoke. Tobacco is clearly one product with virtually no redeeming personal or social values. Research does suggest that the rising cost of cigarettes does cause decreased use. If, at the state level, we were to raise the tax on cigarettes and ban use in all public places we could positively impact health, healthcare costs and our economy. With elections right around the corner, this would be an excellent topic to add to the list of issues for our legislators.


If you have avoided the habit or beaten the habit, pass this article along to a smoker that you care about. You may just save their life and make him or her a millionaire!

Estate Planning: Preparing for the Unexpected

All of us know of someone who has become incapacitated and unable to tend to their financial affairs. However, most people don’t realize that without proper advance planning, this situation can quickly turn into a nightmare. For example, assume that you are married and your husband is left mentally incapacitated as a result of a stroke. You own your home jointly and he owns $250,000 in stocks in his name. You need access to cash for special medical treatments so you plan to sell his stocks, right? Wrong! You do not have the legal right to sell his stocks and since he cannot give you permission, your only alternative is a potentially lengthy and expensive legal process to gain access to his assets…if the court grants you access.

The best defense is to prepare now for the possibility that you may become incapacitated in the future. There are four legal documents that you should consider.

1. Durable power of attorney. With this document, you appoint another person to be your 'attorney-in-fact', giving that person the responsibility of making financial decisions on your behalf. You may choose language that provides very broad or narrow powers. For instance, the document can be drafted to allow your attorney-in-fact to act on your behalf only if you are incapacitated (springing power) or it can allow your attorney-in-fact to act on your behalf at any time (general power). Your attorney or financial advisor can advise you which document will be best for you.
2. Revocable living trust. With this strategy, you set up a trust that is revocable (you can terminate it anytime) and transfer title to your assets to the trust. Typically you will be your own trustee, but will also name a successor trustee should you become incapacitated or die. This allows you, not the courts, to control who will continue to manage your financial affairs should you be unable to do so. The revocable living trust also protects your privacy whereas court proceedings may not. However, because of the cost and complexity of this trust, I only recommend it in special situations. For example, I had a client whose relatives threatened to have her declared incompetent and themselves declared trustee for her money as well as her legal guardian. As a safeguard, we used the revocable living trust to make certain that, regardless of the outcome, my client could decide who took control.
3. Healthcare proxy. Similar to the durable power of attorney, the healthcare proxy allows you to appoint the person who will be responsible for making healthcare decisions for you should you be unable to do so.
4. Advanced healthcare directive. With this document, you indicate the level of life-prolonging procedures, pain treatment, etc. that you wish should you be terminally ill and unable to communicate your desires. In Alabama, our legislature has drafted a document that combines the healthcare proxy and advanced healthcare directive. You can receive a copy by visiting the Resource Center at www.welchgroup.com; click on ‘Links’; then click on “Living Will- State by State” .

As you read this column, I urge you to look beyond your own situation and send a copy of this column to friends and family members who may benefit from this advice.