Category: Estate Planning
June 8, 2024 -- A significant portion of older adults have not completed essential estate planning documents. In fact according to one survey, only about 55% of people over 55 have a will. Beyond creating an estate plan, there are a number of other tactics that you can take to protect your wishes and maximize the legacy of what you have created.
Since the estate tax exclusion is now $13.61 million, the federal tax on estates is not generally an issue. The amount not subject to tax has been raised to the point that it only applies to a tiny percentage of Americans. When the limitation was lower, estate planning was more complicated. However those days could be coming again, because if congress does not act, the exclusion could revert to $5 million in 2025.
Estate Moves to Make Now
Meanwhile there are many things that people can do to protect their estates, minimize taxes, and make things easier for their heirs and executors. We list some of them below, recognizing that many will not apply to those in the Topretirements community with uncomplicated and smaller resources. But most apply to everyone, no matter how small their estate might be.
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Published on June 7, 2024
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Category: Estate Planning
July 20, 2023 -- Just about everyone knows that not having a will is a really bad idea. But still, about 60% of Americans either don't have one or have no estate planning. But almost as bad as not having a formal will is having more than one, or not having it designed by a professional and signed in the presence of witnesses. That is the case in the Aretha Franklin estate case, which was decided by a jury last week.
Franklin's estate was reportedly worth $80 million when she died in 2018. But last week its value was estimated to be about $6 million (plus song royalties, etc.). Where did all that money go - it went to expenses, taxes, and lawyers trying to figure out how the estate should be settled among her 4 sons.
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Published on July 19, 2023
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Category: Estate Planning
November 30, 2021 -- It is amazing how many times this question comes up, usually from people who we consider very proactive about their retirements. There are no easy answers to the question, but there are some guidelines. Adding to the mix, if the provision of the Build Back Better plan concerning Roth conversions is included in any final bill that gets congressional approval, there might never be a better time to consider it than right now.
The legislation being considered would prohibit the conversion of after-tax assets from traditional IRAs and employer-sponsored retirement plans into Roth accounts after December 31, 2021. No one knows what will happen in congress these days. But, if you think that law has a chance of passing, this could be your last chance to convert.
What is a Roth IRA?
Basically, in a Roth IRA you contribute after-tax income into a tax friendly retirement account. The money you contribute and future income and gains are shielded from future taxation. Unlike regular IRAs, you don't have to withdraw anything from it during your lifetime. And if you do, you won't pay taxes on those withdrawals. The SECURE Act changed the law on how long a period your heirs (except spouses, minor children, etc.) have to withdraw the money - it now has to be completed over 10 years. Unlike contributions to a regular IRA or employer-sponsored retirement plan, you cannot deduct the initial contribution from your current income.
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Published on November 29, 2021
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Category: Estate Planning
April 12, 2021 -- Today we are fortunate to have an interview with Jim, a retired vice president and trust officer at a large Pennsylvania bank, who spent his entire career administering estates of all kinds and sizes. We think you will find his real life examples of what to do - and what not to do - in estate planning very useful.
The tips, advice, and experience that Jim brings to this important topic is critical, since inevitably, everyone needs an estate plan. Jim believes that only about 50-75% of people of retirement age have an estate plan of some kind. Most of those folks have wills, while a much smaller percentage have trusts. As he pointed out early on in our interview, even if you think you don't have an estate plan, you actually do. That is because in the event of no will or trust, the government has rules about how your assets will be divided after your death. The problem is that it probably won't be distributed the way you wanted it to be done.
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Published on April 12, 2021
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Category: Estate Planning
June 23, 2020 -- Note: This article starts with the premise that it is crucial for every person of retirement age (and younger) to have a will and/or an estate plan, no matter how small the assets you own. If you don't have a legal document, you are going to leave a huge mess for your heirs to clean up, you will waste money on probate expenses, and perhaps end up with a result you wouldn't like.
Every family is different in so many ways. Couples might have children that are equally successful and get along well. But for family like that there are those with a child who has had a hard time, a disability, or other issue. Families with stepchildren face additional challenges. Many people worry about a child they feel is not responsible, and who might squander any bequest on drugs, gambling, etc. There might be a family business where one or more siblings, but not all, are actively working. It can get very complicated. And, your children probably know if have already substantially helped one child financially more than the others.
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Published on June 23, 2020
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Category: Estate Planning
August 30, 2018 - Is your estate planning goal to maximize the amount of money you give to the IRS, give probate attorneys a huge cut of your assets, leave nothing to your favorite charities, and pit your relatives against each other in family destroying battles over money and possessions? If those are your goals, achieving it is easy, just die without a will.
We will all miss Aretha Franklin. Her music lives on, but one thing her heirs will miss, besides the Queen of Soul, is a will. Reportedly, like Prince, she did not leave a last will and testament. Some people never get around to a will because they don't want to take the time, or possibly admit their mortality. Others dither because they can't make
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Published on August 29, 2018
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Category: Estate Planning
August 31, 2016 -- Consider this unpleasant scenario: You go to bed tonight and don't wake up. Instead, you go on to your greater reward, leaving a saddened spouse, family, and friends. They, on the other hand, are about to find out how well you prepared for this event. While not fun to think about, this is not an "if" it happens situation, it is only "when".
Not so long ago your heirs would face many unpleasant chores as a result of your untimely death, but at least the tasks were relatively straightforward. Assets could generally be traced by looking in file folders, safe deposit boxes, and various spots around the house. Statements would eventually come in the mail, alerting your survivors to the existence of various accounts. Now in the digital age, your executor or surviving spouse face the same tasks, only they tend to be much more difficult. That is mainly because so many of your assets and accounts only exist online. How will they find out what accounts
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Published on August 30, 2016
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