Now you can manage most aspects of your money without ever consulting another human being. You can budget, borrow, save, invest, buy insurance, prepare your tax return, and create a will, among many other tasks, using apps, websites, and software.
But technology still has limits, especially when you are faced with a complex financial situation or involving appeals for judgment. Consider seeing a human expert in the following situations:
1. YOU ARE CREATING A HERITAGE PLAN
According to the Insurance Information Institute, a professional group, insurers generally cannot cancel a policy after 60 days unless you fail to pay premiums, commit fraud, or make serious misrepresentation on your claim. However, insurers may decide not to renew your policy when it expires.
With auto insurance, you often have many options after such a “non-renewal”. Even if you’ve had accidents or multiple claims, you can usually find coverage from companies that specialize in high-risk drivers.
However, if a home insurance company dumps you, you might have a hard time finding coverage, says Amy Bach, consumer insurance advocate. This is especially true if you’ve been kicked out because you’ve made too many claims or if your area is considered high risk due to forest fires, extreme weather, or crime, for example.
How would other businesses know? Insurers share this information in databases, and claim forms typically ask if you’ve been “non-renewed” by another insurer, Bach says.
Bach’s nonprofit United Policyholders recommends looking for an independent agent or broker who has relationships with multiple insurance companies. The agent or broker needs to know which insurers may be more receptive to your request and can put a word in your favor, Bach says. Although most underwriting decisions are made by computers, there are still ways for humans to override algorithms.
“It will make a difference if (the agent or broker) can call an underwriter they know and vouch for you as a good bet,” Bach said.
If your area has been labeled high risk, ask your neighbors to recommend agents or brokers who have helped them find coverage. Alternatively, you can ask an accountant, lawyer, or financial planner if they have any recommendations. Friends and family may also be able to provide leads.
2. YOU ARE CREATING A HERITAGE PLAN
Most IRS audits are done by mail and are relatively routine. The IRS sends a letter requesting additional documentation to support a deduction or other tax relief you have taken. If you return sufficient proof by mail, your case will be closed and no taxes are due. Otherwise, the IRS will send you an invoice in the mail.
However, if the IRS wants to meet with you, the stakes get much higher. In fiscal 2020, the average amount of additional fees recommended in face-to-face audits was nearly 10 times the average for a correspondence audit: $ 72,210 versus $ 7,658, according to statistics from the IRS.
Even tax professionals hire someone to represent them in face-to-face audits, says Leonard Wright, a certified public accountant and financial planner in San Diego. Wright has a lot of experience: he was the CFO of a company that was audited, and his personal tax returns were audited four times. In each case, he hired another CPA to represent him.
It’s too easy to say something you shouldn’t say when you’re under surveillance, Wright says. You may come up with information that may not be helpful to you, or become defensive or confrontational.
“You don’t want it to get personal and you don’t want to ruffle the listener’s feathers,” Wright says.
If you have used a tax preparer, you can assume that this person can represent you during an audit, but this is not always the case. Typically, CPAs, attorneys, and registered agents can represent clients in IRS audits, but other tax professionals typically cannot. Your tax preparer may be able to refer you to someone who can represent you, or you may get referrals from friends, family, or financial advisors.
3. YOU CREATE A BRANCH PLAN
Will drafting software and estate planning sites can help you create essential legal documents if money is running out. If not, you should probably consult a lawyer, says Betsy Hannibal, senior legal writer for self-help legal site Nolo.
“Why not get personalized advice tailored to your situation, if you can? Hannibal said.
Getting help is especially important if you need or want to do something complicated with your estate, like putting conditions on a bequest, providing for a person with special needs, or setting up a trust, she says. . You will also need the help of a lawyer if you have a lot of debt, as there may be ways to protect your assets from creditors. Finally, consult a lawyer if you think someone could challenge your will. A lawyer can put in additional protections and serve as a professional witness that you knew what you were doing, Bach says.
“If someone thinks you were on the wrong side, going through a lawyer can help make sure that a legal challenge can’t go ahead,” she says.
This column was provided to The Associated Press by the NerdWallet personal finance website. Liz Weston is a columnist at NerdWallet, a certified financial planner and author of “Your Credit Score”. Email: email@example.com. Twitter: @lizweston.
NerdWallet: When a will won’t work https://bit.ly/nerdwallet-will-limitations