In Financial & Healthcare Decisions, "Trust, But Verify"

Many people today struggle with how to invest money and what to do when a family member faces a health crisis. When you lack expertise for urgent financial and healthcare decisions, take decision-making advice from former US President Ronald Reagan: "trust, but verify."

Mr. Reagan often asserted his "trust, but verify" concept during high-level nuclear disarmament negotiations with Mikhail Gorbachev, the former General Secretary of the Communist Party of the Soviet Union. Reagan's balancing act between attentive listening and healthy skepticism moved the two superpowers from the brink of nuclear annihilation toward a diplomatic relationship that united them briefly as allies in the first Gulf War. We can also benefit from trusting and verifying what we see and hear in financial and healthcare decisions.

Financial and healthcare decisions require more knowledge and expertise than most people possess. Some people accept advice and recommendations from service providers unquestioningly. Other people search for information online and assume that reputable sources like national news services and Christian financial advisors have all the answers. Wise people seek advice from reputable local sources and verify the advice with other sources by asking these questions:

1. When I search online and ask people in the community, which local advisor's name keeps popping up as the most reliable?

2. Does this person listen to me and answer my questions clearly and patiently?

3. Does this person have an interest that conflicts with what I want?

4. Do other information sources verify what this person is telling me?

5. If other information sources contradict or conflict with what this person is telling me, does the person have a sensible explanation for the apparent contradiction or conflict?

6. Do I still have confidence in this person's advice after verification?

A trustee client used this verification process when the trustee needed to invest almost $1 million during the most volatile days of the Great Recession a few years ago. The trust agreement required the trustee to pay income to current beneficiaries and preserve the trust's value for future beneficiaries. A financial advisor recommended an investment solution that seemed to balance between these two conflicting objectives, but the trustee knew that the advisor would earn a commission on the sale and wanted to verify the investment recommendation. The trustee paid a separate investment advisor for a second opinion, which included sharp criticism of the first advisor's recommendation. The trustee used the second advisor's critique to interview the first advisor and was satisfied with the first advisor's answers. The financial markets crashed just a few days after the trustee's investment, but the investment remained stable so that the trustee could pay income to the current beneficiaries with complete confidence about preserving wealth for the future beneficiaries.

Hospitals and nursing homes need patients to be able to pay the facilities' fees and expenses. Most hospitals and nursing homes address this need by hiring staff to help patients solve health insurance, Medicare, and Medicaid benefit problems. Hospital and nursing homes pay staff to solve health insurance, Medicare, and Medicaid benefit problems quickly, but not to help families plan or make the best possible financial decisions. This is not to say that hospitals and nursing homes have conflicts of interest in financial matters, but their employees are not expert legal and financial advisors. Therefore, people should use the "trust, but verify" approach to hire expert legal and financial advisors, and let hospitals and nursing homes do what they do best -- provide healthcare to patients.

Jeff R. Hawkins and Jennifer J. Hawkins are Trust & Estate Specialty Board Certified Indiana Trust & Estate Lawyers and Jeff is a Fellow of the American College of Trust and Estate Counsel. Both lawyers are admitted to practice law in Indiana, and Jeff Hawkins is admitted to practice law in Illinois. Jeff is also a registered civil mediator and the 2014-15 President of the Indiana State Bar Association.

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