Time It
Get your timing right. Review and understand your employer’s policies on 401(k) matching and profit sharing. Make sure you plan to retire at a time when you can reap all the vested benefits you have coming to you before they expire. Sit down with your company’s HR department to maximize your retirement benefits.
Bridge the Insurance Gap
If you are retiring before the age of 65, you could have a lapse in insurance coverage before you are eligible for Medicare. If your employer doesn’t offer retiree health insurance benefits (and most don’t), look into COBRA insurance to extend your current coverage or an individual insurance plan to carry you over until Medicare kicks in. Don’t forget about life insurance and long-term care insurance either. If you do not have an insurance advisor you trust, we can refer you to someone, and we can also provide an objective backstop review on any insurance you do have in place to make sure it’s the right amounts and right types for you.
Petition for Your Pension
Apply for your pension at least five months before you retire. Get a benefits statement, and consider your payout options if you have them (e.g. lump sum vs. annuity). Coordinate your pension payout to minimize your tax liability while still meeting your financial needs.
Rearrange Your Retirement Funds
Consider consolidating accounts and rolling 401(k) funds into an IRA for more investment freedom and easier management. Conversely, some retirees find the investment options with employer-provided 401(k)s are cheaper than those bought independently. Make sure you discuss your options with a financial professional and choose the option that maximizes your income and gives you the flexibility you need. And, of course, ensure your beneficiary designations are set up to make sure your retirement benefits go exactly where you choose
Planning a strategic retirement takes forethought, and don’t short sell yourself on all the perks you may be owed. Make sure you take advantage of all the benefits your employer offers and carefully plan how you will manage your retirement income to minimize tax liabilities. Following these simple steps can help ensure you are financially prepared for retirement.
If you are nearing retirement, consider sitting down with a Personal Family Lawyer®. As your Personal Family Lawyer®, we can help you strategize your retirement to reap maximum benefit before you retire. Before the session, we’ll send you a Family Wealth Inventory and Assessment to complete that will get you thinking about what you own, what matters most to you, and what you need to do to preserve your financial well-being and retire comfortably.
This article is a service of [nap_names id="FIRM-NAME-1"], Personal Family Lawyer®. We don’t just draft documents, we ensure you make informed and empowered decisions about life and death, for yourself and the people you love. That's why we offer a Family Wealth Planning Session™ during which you will get more financially organized than you’ve ever been before, and make all the best choices for the people you love. Begin by calling our office today to schedule a Family Wealth Planning Session and mention this article to find out how to get this $750 session at no charge.
]]>As parents, including provisions for the care of their children in their estate plan is essential for peace of mind. As essential as this is, many parents struggle with including such provisions as naming a legal guardian for their child in their plan. Indeed, even the fictional parents in the popular television sitcom Modern Family struggled with this issue in a recent episode. In this episode, while Jay and his new, much younger wife Gloria agonized and argued about who they should name as a legal guardian, their children were left at risk that if something happened to Jay and Gloria before they decided and properly named guardians in a legal document, a judge would make the decision for them. Not ideal, under any circumstances.
When naming a legal guardian for your minor children, there are many factors to consider, such as whether the guardian has similar values to yours or can provide a welcoming home environment. But the toughest decisions are often the most important. Consider the outcome if you died without having legal protections for your children in place. Your children could be subject to conflict between relatives or they could be raised by someone you would never want, or in a way you wouldn’t want. They could even temporarily be taken into the care of strangers.
Identifying and naming a legal guardian for your children in your estate plan is a difficult and important task. Don’t put off naming a legal guardian for your child. While thinking about what will happen to your child if you die is difficult even for fictional parents, your kids deserve the protection and you deserve the peace of mind that a legal guardian can provide.
Unfortunately, even if you have made the hard decisions and worked with a lawyer to name legal guardians in a Will, your kids could still be at risk, because that would not take into account what happens if you become incapacitated, or if your named guardians all live far from your home, and it wouldn’t protect against anyone who may challenge your decisions. The only way to ensure your kids are raised by the people you want, in the way you want, never taken into the care of strangers (even temporarily) and that your kids would never be raised by anyone you wouldn’t want, is by creating a comprehensive Kids Protection Plan®, which only a select few lawyers, like us, are trained to prepare.
If you are ready to take that step, start by sitting down with us. As your Personal Family Lawyer®, we can walk you step by step through creating a comprehensive Kids Protection Plan® that not only names a legal guardian for your child in your Will, but also ensures your kids care is fully provided for, in the short-term and the long-term, and in the event of your incapacity.
Working with a trusted Personal Family Lawyer® will ensure your entire family is protected and cared for no matter what.
This article is a service of [nap_names id="FIRM-NAME-1"], Personal Family Lawyer®. We don’t just draft documents, we ensure you make informed and empowered decisions about life and death, for yourself and the people you love. That's why we offer a Family Wealth Planning Session™ during which you will get more financially organized than you’ve ever been before, and make all the best choices for the people you love. You can begin by calling our office today to schedule a Family Wealth Planning Session and mention this article to find out how to get this $750 session at no charge.
]]>The estate tax (aka the death tax) is a federal tax on the transfer of property in the estate of someone who has passed. Upon death, your estate’s taxable value is assessed and then taxed. There are many rules on when and how the estate tax can be taken, but Trump plans to repeal the estate tax altogether.
Comparatively, the estate tax is not a huge revenue producer for the IRS, and many believe the estate tax is baseless, while other forms of property transfers between family members are untaxed, such as property divisions as the result of divorce.
While many applaud the suggested repeal, it’s important to remember that lost revenue will certainly be gained elsewhere. Though the estate tax may be abolished, Trump still plans on initiating a capital gains tax on any assets left to heirs over the $10 million threshold.
Some argue that the estate tax only affects the very wealthy. Indeed, the 2017 federal estate tax exemption is $5.49 million. Estates valued below that threshold will not be taxed. For families with significant wealth, steps should be taken to plan for a potential estate tax, even if the estate tax is repealed because it’s likely to return in the future, even if it is repealed now.
Basing estate plans on proposed tax reform is unwise. However, considering proposed tax changes as well as the changing political climate while planning your estate will help you make educated decisions. Regardless of the size of your estate, now is a great time to sit down and discuss your estate planning options with a Personal Family Lawyer®.
Proper planning for your estate means staying abreast of changing tax regulations and ensuring your estate plan minimizes its tax burden and protects the assets you will leave behind. Because tax regulations are not set in stone and change quite frequently, it’s important to work with a Personal Family Lawyer® to prepare for all eventualities.
And, of course estate planning is about so much more than just saving taxes, and even about so much more than just your financial estate. As your Personal Family Lawyer®, we see estate planning as about helping you make the very best personal, financial and legal decisions for your wealth, health and happiness throughout your lifetime and then being there for your loved one’s to minimize conflict, when you cannot be.
This article is a service of [nap_names id="FIRM-NAME-1"], Personal Family Lawyer®. We don’t just draft documents, we ensure you make informed and empowered decisions about life and death, for yourself and the people you love. That's why we offer a Family Wealth Planning Session™ during which you will get more financially organized than you’ve ever been before, and make all the best choices for the people you love. You can begin by calling our office today to schedule a Family Wealth Planning Session and mention this article to find out how to get this $750 session at no charge.
]]>Significant changes in the way we define family culturally means more families are left without the valuable protection they need, in the event of a death or incapacity of a loved one.
As these legal definitions and our personal situations expand, so do the priorities of the modern estate plan.
No longer is estate planning just for the wealthy, who wish to save money on their taxes; it’s for all of us who want to ensure our legal system recognizes the one’s we love.
For example, if you are in a life partnership (or more than one), married in the eyes of your community, but not married in the eyes of the law, your partner would have no legal right to see you or make decisions on your behalf, if you were hospitalized.
Even if you are married, your spouse or partner would not be able to access your financial accounts, without court intervention, without proper legal planning in advance. And, if you are not married, the Court is unlikely to give a non-legal spouse access and would instead appoint a professional fiduciary before allowing your unmarried partner access.
If you are part of a blended family (meaning one or both spouses have children from a prior relationship) or have children who aren’t biologically both yours and your spouse’s (or non-spouse partner), you need to include provisions in your estate plan that clearly define the inheritance rights of all children, biological or not.
It is vitally important that you clearly define any legally established relationships between you, your spouse (or non-spouse partners and loved ones) and your children, biological or otherwise, to ensure your wishes will be carried out in the event of your death or incapacity. If you do not do this, your kids could end up in the care of someone you would never want and taken out of the home of the non-biological parent they are living with.
Whatever your family’s configuration may be, estate planning is your chance to safeguard the people you love and your assets on your own terms and according to your own definitions. With the uncertainty of the current political and social climate, developing a carefully crafted plan tailored to your family’s needs is more important than ever.
If you need help crafting estate-planning instruments that adequately protect your family and your wealth but are flexible enough to be relevant as our legal definitions of family change, start by coming in to meet with us for a Family Wealth Planning Session. As your Personal Family Lawyer®, we can guide you in creating a comprehensive estate plan that protects and preserves your family’s values, as well as your assets. Before the session, we’ll send you a Family Wealth Inventory and Assessment™ to complete that will get you thinking about what you own, what matters most to you and what you want to leave behind and ensure that none of your assets are lost to the Court or government processes that don’t really serve your desires.
This article is a service of [nap_names id="FIRM-NAME-1"], Personal Family Lawyer®. We don’t just draft documents, we ensure you make informed and empowered decisions about life and death, for yourself and the people you love. That's why we offer a Family Wealth Planning Session™ during which you will get more financially organized than you’ve ever been before, and make all the best choices for the people you love. You can begin by calling our office today to schedule a Family Wealth Planning Session and mention this article to find out how to get this $750 session at no charge.
]]>Back in the day, when the estate tax exemption was $675,000 to $1,000,000, most living trusts were drafted to provide for a mandatory split of trust assets upon the death of the first spouse.
This was done to ensure that the full estate tax exemption was used and unnecessary estate taxes were avoided.
A split of the trust assets is still appropriate in certain circumstances, but not for the same reasons, and currently, it would not be handled in the same way.
For example, if you are in a second marriage, with children from a prior marriage, you are likely to want a split of trust assets at the first death. This ensures that the surviving spouse can use the assets of the first spouse to die during his or her life, but that the remaining assets after the death of the surviving spouse return to the children of the deceased spouse and are not diverted to a new spouse or children from a new marriage.
However, if you are in a first marriage situation, all children are from the current marriage and no additional children are likely, splitting the assets at the death of the first spouse adds significant cost and unnecessary complexity.
So, what can you do to make sure your trust still meets your needs? Have it reviewed!
First and foremost, read through your trust document to see if it includes this language:
"A pecuniary amount equal to the maximum marital deduction allowable for determining the federal estate tax payable because of the death of the Deceased Spouse reduced by the final federal estate tax values of all property interests that qualify to satisfy the marital deduction and that pass or have passed to or in trust for the Surviving Spouse, other than property interests that pass by virtue of this provision.
If, after allowing for the unified credit which has not been claimed by the Deceased Spouse for transfers made during the life of the Deceased Spouse, the amount described above is more than is necessary to eliminate any federal estate tax with respect to the estate of the Deceased Spouse, then the above described amount will be reduced by the amount needed to increase the taxable estate of the Deceased Spouse to the largest amount which will result in no federal estate tax being imposed on the estate of the Deceased Spouse.
This amount shall vest immediately on the death of the Deceased Spouse and shall be satisfied by the Trustee in cash, or in kind, or partly in each, with assets of the Deceased Spouse contributed or added to the trust and eligible for the marital deduction. The assets allocated in kind shall be considered to satisfy this amount on the basis of their values at the date or dates of the allocation to the Survivor's Trust."
If it includes any language like this, call us. We can ensure your trust meets the needs of your family. Otherwise, you may have a plan in place that leaves your family worse off after you die or in the event that you become incapacitated.
Estate planning isn’t a set it and forget it practice. It’s a living process that supports you in making financial, legal and personal decisions that are right for you, throughout your lifetime. Quality of life is improved when you face your death with honesty, knowing you will leave the world a better place.
If you’re ready to review your estate plan, we have a 50-point do-it-yourself review checklist available. We also invite you to come into our office for a full plan check-up. Simply call us and mention this article and we can discuss your options. You can reach us at [nap_phone id="LOCAL-CT-NUMBER-1"].
This article is a service of [nap_names id="FIRM-NAME-1"], Personal Family Lawyer®. We don’t just draft documents, we ensure you make informed and empowered decisions about life and death, for yourself and the people you love. That's why we offer a Family Wealth Planning Session,™ during which you will get more financially organized than you’ve ever been before, and make all the best choices for the people you love. You can begin by calling our office today to schedule a Family Wealth Planning Session. Mention this article to find out how to get a $750 session at no charge.
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