While the process starts early, with saving and building wealth, the long game requires protecting that wealth during retirement, which could be many decades long.
It’s hard to imagine during your 30s or 40s that retirement will actually arrive. Life is busy, with careers, raising families and saving for retirement, including investing in IRAs, 401(k)s and other savings vehicles. During those years, your estate plan is a necessary part of planning for retirement and protecting your family with documents that include a will, health care proxy and power of attorney.
As Marco Eagle’s article, “Money Talks: Estate planning tools” explains, the next phase is the retirement stage, when the focus shifts from accumulation to preservation and maintenance of the nest egg.
Growth is a component of any retirement plan, but protecting your purchasing power during retirement is critical. You also want to generate a predictable stream of income during retirement, in order to avoid compromising your lifestyle.
The final stage of successful retirement planning is often overlooked: that’s the estate planning phase or the strategy of a succession plan to pass assets to your family. There are many estate planning tools that can be used to execute an estate plan. You can create a personal trust. Under this arrangement, your assets are transferred into a trust during your lifetime and then transferred by the trust at death. It’s important from both a tax standpoint and an allocation standpoint, regarding who receives what and how much. This is what your estate plan does for you and your family.
Work with an experienced estate and trusts attorney to establish your estate plan, so you can achieve your final objectives when passing assets to the next generation. Some individuals like the ability to exercise control with an effective plan to pass assets to their beneficiaries, without the need for trusts or probate.
There are many types of insured annuity strategies that will pass assets immediately to the beneficiaries, without the need of probate. Avoiding probate is frequently part of a strategy to make the assets available, immediately after the death certificate is issued.
Many people incorporate life insurance as part of their estate plan in an effort to provide an asset for beneficiaries that is, for the most part, tax free. While it’s always good to avoid taxable events upon death for your heirs, this is one of many tools to be incorporated into your estate plan. An estate planning attorney will be able to provide you with guidance that is best suited for your family.
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