Do you have an estate plan? At first glance, it may seem like a fairly simple proposition. After all, a will addresses many estate planning challenges. If you have a will, you may feel like your estate plan is settled.
Unfortunately, nearly 60 percent of adults don’t have a will, according to a study from Caring.com.1 Even if you have a will, however, you and your heirs could still face estate planning challenges. Those issues could create significant costs and delays that impact your legacy. Below are a few common estate planning mistakes and how to avoid them. Do any of these sound familiar? If so, now may be the time to talk to your financial professional and take action. Incorrect BeneficiariesYou likely have accounts with beneficiary designations, like life insurance, annuities and qualified retirement plans. A beneficiary designation can be helpful because the death benefit is paid directly to your loved ones. The assets bypass probate altogether. What happens if your beneficiary passes away before you? Most accounts allow you to name a contingent beneficiary who receives the benefit if your primary beneficiary isn’t available. If you fail to name a contingent, however, the benefit goes to your estate. That means it goes through probate, which could delay distribution and generate fees. Minor Children as HeirsDo you want to leave a legacy for your young children or grandchildren? If so, you may be tempted to name them directly in your will or as beneficiaries on your account. That could create issues, though. Many courts and financial institutions won’t pay a benefit or inheritance directly to a child. The probate court may name a guardian to receive the money on the child’s behalf. You can avoid this risk by creating a trust for the benefit of the children. In the trust document, you can state specific instructions for how the assets should be managed and distributed. That means the funds are put to use exactly as you wish, without involving courts, lawyers or other parties. No Power of AttorneyEstate planning is all about the distribution of your assets after you pass away. However, estate planning isn’t just for what happens after you pass away. You can also use your estate strategy to plan for end-of-life issues. One effective strategy is to name a trusted individual as your power of attorney. This gives that person the ability to make financial and health care decisions on your behalf in the event you become physically unable to do so. Your power of attorney can pay your bills, sell assets, make investment decisions and more. If you don’t have a power of attorney and become incapacitated because of Alzheimer’s or another condition, you may have people making decisions that aren’t in your best interest. For example, individuals could make financial or health care decisions that go against your wishes. Probate IssuesA will is a powerful estate planning tool, but it doesn’t cover everything. Even if you have a will, your estate will still have to go through probate, which is the legal process for settling an estate. It involves things like filing final tax returns, selling assets and notifying heirs. It can be costly and time-consuming. Fortunately, you can use tools such as annuities, life insurance, trusts and more to minimize your estate’s exposure to probate. That could maximize the amount of your legacy and get your assets distributed to your heirs faster. A financial professional can help you develop a probate strategy. Ready to bolster your estate plan? Let’s talk about it. Contact us today at Binversie and Associates. We can help you analyze your needs and create a plan. Let’s connect soon and start the conversation. 1https://www.kiplinger.com/article/retirement/T021-C032-S014-10-surprisingly-common-estate-planning-mistakes.html Licensed Insurance Professional. This information is designed to provide a general overview with regard to the subject matter covered and is not state specific. The authors, publisher and host are not providing legal, accounting or specific advice for your situation. By providing your information, you give consent to be contacted about the possible sale of an insurance or annuity product. This information has been provided by a Licensed Insurance Professional and does not necessarily represent the views of the presenting insurance professional. The statements and opinions expressed are those of the author and are subject to change at any time. All information is believed to be from reliable sources; however, presenting insurance professional makes no representation as to its completeness or accuracy. This material has been prepared for informational and educational purposes only. It is not intended to provide, and should not be relied upon for, accounting, legal, tax or investment advice. This information has been provided by a Licensed Insurance Professional and is not sponsored or endorsed by the Social Security Administration or any government agency. 18274 - 2018/11/27 Holiday season is here again. The new year is almost upon us, and 2018 will soon be in the rearview mirror. You’re probably busy right now looking for the perfect gifts for your friends and loved ones. However, you also may want to take some time at the end of the year to give a gift to yourself. What’s the perfect gift for yourself this holiday season? Perhaps the latest gadget or new clothes? Maybe even a vacation? While those ideas are all valid, consider something that will have a lasting impact on your future: increased retirement savings. If you’re concerned about your retirement savings, you’re not alone. According to a Gallup survey, 54 percent of Americans are worried about not being able to afford retirement.1 The holidays may not traditionally be the season of financial planning, but the year-end represents an ideal time to make changes and take action. Give yourself the gift of a solid retirement strategy this holiday season. A financial professional can help you conduct a full review and recommend possible changes. Below are a few steps to consider: Contribute to an IRA.An IRA is a popular and effective retirement savings tool because it offers a wide range of tax benefits. You may be able to deduct your contributions to a traditional IRA. Your earnings in the account also grow tax-deferred until you take a distribution. In a Roth IRA, you don’t get deductions for your contributions, but you do get tax-deferred growth and tax-free withdrawals after age 59½. In 2018 you can contribute up to $5,500 to either a traditional or a Roth IRA. That number increases to $6,500 if you’re age 50 or older. In 2019 those limits increase to $6,000 and $7,000, respectively. If you haven’t hit your limit for 2018, you have until April 15, 2019, to do so. Look at your budget and consider giving yourself an IRA contribution this holiday season.2 Gradually increase your 401(k) contributions.Do you participate in an employer 401(k) plan? In 2019 the maximum contribution increases, so you can put away even more money. The new 401(k) maximum contribution will be $19,000 next year. If you’re age 50 or older, you can contribute an additional $6,000 in catch-up contributions.3 Of course, not everyone can afford to put $19,000 per year into a retirement plan. However, even a small increase in your contribution can have a big impact. Look for ways to gradually raise your contribution rate over time. You can get a head start by increasing your contribution this holiday season. Project your retirement income.How much income will your savings produce in retirement? How much income can you expect from Social Security or a pension? If you don’t know the answers to these questions, you may want to meet with a financial professional to develop a retirement income estimate. A financial professional can project your potential income from Social Security, a pension, savings or other sources. That can help you determine whether you’re on the right path or if you need to make adjustments. You could also examine tools to protect your income, like an annuity. Ready to take control of your retirement strategy this holiday season? Let’s talk about it. Contact us today at Binversie and Associates. We can help you analyze your needs and develop a plan. Let’s connect soon and start the conversation. 1https://news.gallup.com/poll/210890/americans-financial-anxieties-ease-2017.aspx 2https://www.irs.gov/retirement-plans/plan-participant-employee/retirement-topics-ira-contribution-limits 3https://www.irs.gov/newsroom/401k-contribution-limit-increases-to-19000-for-2019-ira-limit-increases-to-6000 Licensed Insurance Professional. This information is designed to provide a general overview with regard to the subject matter covered and is not state specific. The authors, publisher and host are not providing legal, accounting or specific advice for your situation. By providing your information, you give consent to be contacted about the possible sale of an insurance or annuity product. This information has been provided by a Licensed Insurance Professional and does not necessarily represent the views of the presenting insurance professional. The statements and opinions expressed are those of the author and are subject to change at any time. All information is believed to be from reliable sources; however, presenting insurance professional makes no representation as to its completeness or accuracy. This material has been prepared for informational and educational purposes only. It is not intended to provide, and should not be relied upon for, accounting, legal, tax or investment advice. This information has been provided by a Licensed Insurance Professional and is not sponsored or endorsed by the Social Security Administration or any government agency. 18280 - 2018/11/28 |
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