New Year Resolutions and Your Estate Plan

It’s not too late to start thinking about an estate plan, if you have not created one for yourself. Even if you already have an estate plan, at least once a year, you should evaluate your plan to make sure that it continues to provide for you and your family as you desire. By now, the holiday season has come and gone. If you postponed tackling resolutions of planning for retirement, saving more money, or even getting your financial affairs in order, start today. Careful estate planning can help ensure that the period leading up to your death and death is less difficult and stressful for your family financially.

Before you can create an estate plan that is right for you and your family, deep thinking, is in order. You may want to consider the following to help set the mental framework for this exercise.

If you do not have an estate plan . . .

  • Do I have a power of attorney that expresses my wishes about my finances in the event of my incapacity?
  • Do I have a living will that expresses my wishes about my health in the event of my incapacity?
  • Will my retirement accounts pass to my beneficiaries in a protected and tax-efficient manner, in light of recent legislation?
  • Have I developed a succession plan for my business?

 If you have an estate plan. . .

  • Is my current estate plan set-up to minimize family effort and expense at my death?
  • Does my estate plan need to be updated to account for recent tax legislation changes?
  • Have I implemented planning that will allow my business to continue to operate after my incapacity or death?
  • Do I need to make any changes to my retirement accounts and how they will pass to my beneficiaries, in light of recent tax legislation changes?

In 2018, a series of laws went into effect that now impacts retirement account inheritances and the estate tax. The biggest change has come from the SECURE Act and its provisions that substantially alter income tax deferral opportunities with regard to inherited retirement accounts. For those who have not established an estate plan, understanding the new parameters will change some of the plans you were thinking about or benefited from when your spouse or parents passed away. If you already have an estate plan and it was established before the new legislation went into effect, tax inefficiencies, should be reviewed and if significant changed.

Suggested Action:

Move estate and related retirement planning to the top of your 2020 resolutions list. There is no time like the present to implement or update a plan that will be meaningful to your family.

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