secretsSecrecy may be essential in affairs of state, but it’s not an especially good idea in a conversation about your financial affairs with an advisor. “You shouldn’t keep your symptoms a secret from your doctor, and you shouldn’t withhold pertinent information from your lawyer. Doing so can lead to unfortunate consequences. This same idea applies to your relationship with your financial advisor,” writes Chip Hollingsworth in an excellent article. “It’s important that you’re upfront and honest when meeting with your financial advisor. Here are the top 10 secrets I’ve seen clients keep to themselves over the past 25 years:

  1. “I’m thinking of divorcing my spouse/getting married.”

Many clients feel that a change in their marital status has no impact on their financial plan. That’s simply not true; a change in marital status can affect future generations.

A well-designed financial plan will address prenuptial agreements, beneficiary designations, transfer-on-death designations, inheritance distributions, blended family concerns and legacy planning. If the financial advisor is kept removed from your plans of divorce or marriage, they won’t be able to implement these considerations into your financial plan.

  1. “I have a lot of credit card debt.”

A few thousand dollars here and there on credit cards might seem irrelevant if you’re able to make the minimum payments, but the cost of this consumer debt can be astronomical over time. For example, it could take you about 30 years to pay off a credit card with a $10,000 balance and 20 percent interest — even if you pay the minimum monthly amount. And, you will have paid $16,000 in interest to the bank.

Do yourself a favor, and let your financial advisor know about your credit card debt. He or she can help you figure out a credit card debt reduction plan so you can avoid paying a large amount of interest.

  1. “I’m going to be a caregiver.”

While a client might not have a health issue, they might find themselves in a caregiver role or being financially responsible for the care of someone. Inform your financial advisor if you’re going to be a caregiver so they can create a comprehensive financial plan that includes liquidity needs, risk management measures and anything else you might need to prepare for the expected and unexpected needs.

  1. “I carry large deductibles.”

Many people have recognized that carrying large deductibles can keep home and auto insurance as well as health insurance premiums low. During your meeting with your financial advisor, they should ask why you’re carrying large deductibles, but in the event that they don’t, let them know that having this level of liquidity is important. You don’t want to have to surrender a variable investment on a down-market day.

  1. “I don’t fully understand risk.”

A good financial advisor will know their client’s risk tolerance. But unfortunately, some clients agree to a more aggressive portfolio design that they don’t fully understand. Never be timid to ask questions. It’s your money, and you’re paying for the advice in some fashion. Don’t walk away from your hard-earned money without knowing how it’s going to be handled — especially in volatile markets.

  1. “I don’t have a will.”

Most states have intestacy laws. Intestacy is the situation created when a person dies without a will. If a person dies without a will, the estate passes to heirs under the state’s intestacy laws, which might not be aligned with the deceased’s wishes.

Keeping this information from your financial advisor can lead to legacy issues and cost the estate money in fees and administrative costs that could have been avoided. Consult a qualified attorney along with your advisor to address the details or your needs and desires.

  1. “I will receive an inheritance.”

I once read a case about a woman who had some assets — all with beneficiary designations that pass outside of a will or probate — and felt she didn’t need a will. The woman fell into a coma due to an accident. While she was in the coma, an aunt passed away and left her a few million dollars in real estate and cash. The recipient never knew she had an estate in her name and thus was impaired from resolving the distribution at her death. In effect, the state intestacy laws directed the distribution.

If you know that you’ll be receiving an inheritance, make sure your financial advisor is in the loop as well. In this woman’s case, a well-written will could have planned on an inheritance even if the details were unknown at the time of establishing the will.

  1. “I have an overspending problem.”

A financial plan should include a spending plan, or what others call a budget. The concept appeals to the idea that some see the glass half full while others see the glass half empty.

Admit during your meeting with your financial advisor that you don’t handle money well so that they can draft up a plan that can help you learn how to spend and save money. With their help, you should be able to get out of debt or even save enough money for a future purchase you’ve always wanted.

  1. “I have a special needs child.”

Most parents of special needs children are rightfully protective of their children. In fact, they’re so protective that they sometimes shelter their children from others — including their financial advisors.

Every case is unique, but many parents struggle with who will be responsible for caring for their child if they die. But a financial advisor has many tools that can help lay out a financial future for a special needs child. And they can help structure the estate so that whoever is caring for the child after the parents’ passing won’t have too much to worry about in that regard.

  1. “I don’t think I pay enough in taxes.”

It took me a while, but I finally understand that a person who gets a tax refund sometimes sees this as a windfall or that they don’t pay too much in taxes. But a tax refund is normally the money they paid in and doesn’t mean they pay the least amount available.

Your advisor should review your income tax situation annually, but volunteer the information if they fail to bring it up. Also, don’t assume that your taxes can’t be reduced; assume the opposite until proven differently.