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Will A Second Marriage Derail Your Estate Plans?

A second marriage can introduce dramatic changes into your life. The financial implications of a second marriage can be significant. While many of the adjustments and changes to your life could have to do with child custody, alimony and division of property, it’s also important to update your estate plan after getting a divorce.

Keeping old estate planning documents empowers someone you might not want with the potential to make decisions on your behalf. In the ending of a marriage, it’s easy to overlook those old details as unimportant, but they are anything but. Your new family should be included in your thoughts about estate planning materials.

All of the money that you might have set aside for your own retirement could have been subject to a division of property, including your 401(k)s and real estate. You might have even been required as part of the divorce to maintain a life insurance policy, naming the first spouse as a beneficiary.

Newly married middle-aged clients often don’t realize that they need to update their estate planning documents to account for this second marriage. In order for second marriages to succeed and not destroy your retirement plans, it is important for both spouses to sit down and discuss one another’s retirement assets, finances and long-term retirement goals.

Coming to the table with a clear picture of what each party has and anticipates can minimize challenges and problems. A knowledgeable estate planning lawyer should be consulted as soon as possible after you have decided to get married.

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What Assets Need to Be Included in My Estate Inventory?

Each person’s estate inventory will look unique, but a careful consideration of the different types of assets that should be included can make it easier for your estate executor and your loved ones when you pass away.

One of the primary reasons that people sit down to establish an estate plan is to ensure that their assets are simply transferred to the new owners that you have chosen and with minimal tax consequences. In order to establish a plan of distribution, you have to know the assets inside the estate.

This makes sure that your family members know exactly what you own so nothing falls through the cracks and so there is no additional conflict or challenges that emerge if you suddenly pass away.

Some of the most important assets to include in your estate plan include:

  • Life insurance policies, even though these will pass outside of your will and are managed through beneficiary designations.
  • Personal property like art, jewelry, furniture and books.
  • Investment accounts.
  • Vehicles
  • Real estate.
  • Ownership interests in any business.
  • Intellectual property.
  • Investment accounts.

When you list out these assets, it is valuable to know how these assets are owned and whether or not you have already designated any beneficiaries on these accounts.

As mentioned above, beneficiary designations may be handled separately from what is outlined in your will, although you should still have an idea of the beneficiaries listed on this account because these will supersede anything listed in your will.

These will matter significantly if they need to be transferred upon your incapacitation or death. Talk to a Virginia estate planning lawyer if you need more advice or help with your planning.

 

 

 

 

 

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Retirement Planning Beyond the Basics

There’s no doubt that the workforce is changing and as more baby boomers are reaching retirement age, this is also raising questions about how retirement is different. Traditional retirement planning might not cut it anymore, particularly if you’re not using comprehensive estate planning tools to target your goals. What is important to consider is making a written retirement plan for your financial and non-financial aspects of your life.

Establishing habits now before retirement makes things easier. While money is certainly a crucial component of your overall retirement plan, you shouldn’t be afraid to use some of the savings you’ve established to create a better life now instead of waiting until later. For example, investing in relationships and in better health can pay off in spades and cut down your overall costs in retirement.

Retirement is ranked 10th out of 43 total stressful events. Some people feel disoriented or overwhelmed in the first couple of years of retirement. There’s no doubt that you’ll be concerned about your life savings being gone before you are, and this is why traditional retirement planning largely focuses on the money.

However, don’t forget about non-financial retirement issues. Living longer makes many people confused because they don’t know what to do about it. Some people fear that living longer just means they are less capable for longer periods of time due to incapacitating events or cognitive issues.

Long-term care planning, brain health considerations, and life insurance are all important. Putting together a written non-financial estate plan should begin by looking at things like family beliefs, values, and traditions. This makes it a lot easier to identify the legacy that you intend to pass on to future generations with ease. Schedule a consultation with an experienced estate planning attorney in Virginia to learn more.

 

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Where Should Wealthy Clients Consider Retiring?

If you are currently amassing a great deal of wealth and are concerned about long term planning for your tax bill, you are better off retiring in Michigan, according to a new study. The study completed by online finance tool company SmartAsset ranked eligible states by the total amount of taxes that you might pay, including your property, state, federal income and estate taxes.

Some of the more expensive parts of the country included Oregon, Rhode Island and Vermont. These had the highest tax burden and therefore ended up at the bottom of the list whereas others like Florida broke the top ten as some of the best places to retire.

States located in the middle of the U.S. faired relatively well for people who had amassed wealth for retirement, excluding states like Wisconsin, Illinois, Tennessee, Nevada and Florida. The study looked specifically at state and federal income taxes for the top 1% of earners. The reported level of estate taxes in 2016 was more than $18.3 billion, according to data collected and presented by the IRS.

The most number of estate tax returns filed during 2015 came from California, followed by Florida and New York. More than 5,000 households filed estate taxes across the country. If you are curious about protecting yourself and the wealth you’ve worked so hard to build, schedule a consultation with an experienced estate planning lawyer today.

 

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How Do I Choose the Right Estate Planning Tools?

Essential estate planning boils down to considerations of protecting your rights if you were to become incapacitated and unable to make decisions for yourself as well as a plan for transferring on your assets to future generations.

Putting together a reliable and comprehensive estate plan, including tools such as a durable power of attorney and a will, is one of the most important things you can do to protect your loved ones as well as yourself, and far too many adults neglect this. According to a recent survey completed by Caring.com, 6 out of every 10 adults have not drawn up estate planning documents.

Fewer than 4 in 10 families with young children have designated a guardian in the event that both parents were to pass away. In the case of death or a sudden emergency, not having these estate planning documents can create problems that would be easily avoided by sitting down with an estate planning attorney.

Far too many people don’t recognize these issues until it’s too late or they’ve had a loved one or friend go through the difficult situation of having the court determine the guardian to step in or a person to be appointed as the executor.

At a very basic level, you should create a will that aligns with your desire for how you want to dispose of your assets after you pass away and appoints an individual known as an executor to carry out your instructions. Furthermore, your will is your opportunity to name a guardian to care for your loved ones if something happens to you. If you pass away without a will, the court is eligible to choose your beneficiaries and to determine who gets what.

Other more advanced estate planning tools, such as a revocable living trust, should be considered with the advice of an experienced estate planning lawyer. You can remove many of the headaches, confusion and conflict between family members by taking your estate planning documents into your own hands with the help of a lawyer in Virginia.

 

 

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Is a Joint Account Best for Estate Planning?

Establishing a joint bank account that allows your children to tap into your finances might initially seem like a good idea.

In fact, you may have recently gone through some challenges with your own loved ones in which the fact that one child was not named on the bank accounts made it much more difficult for these adult children to help if the parent suddenly became incapacitated and unable to make decisions on their own.

This seems like a good idea to prepare for an emergency in the event that you as the aging parent needs assistance with your finances as you get older. But without proper planning and assistance from an attorney, this can cause some serious estate and tax problems.

Other strategies might be more appropriate to enable your adult child step in and make decisions on your behalf such as using a financial power of attorney. Many parents who decide to add a child to their bank account do so to give children access to their money during an emergency, but simply establishing the child as the owner on a joint bank account or on a safe deposit box or investment account can have unintended consequences and may not be the right approach during a family crisis situation.

Many bank accounts set up their joint accounts as joint with rights of survivorship. This means that if your intent was for the assets to be saved during a family crisis and then to be distributed via the terms of the will, this might not happen.

This is because the assets automatically transfer to the surviving owner regardless of what is said in your will. Furthermore, be aware of the fact that you could be facing a federal gift tax issue by naming your child as the co-owner. This depends on the size of the account.

Any U.S. citizen is eligible to receive up to $15,000 per year tax free to anyone that they choose but if the gift is greater than $15,000 and that beneficiary is not a spouse, this could require the need to file a gift tax return.

You might wish instead to use transfers on death, which means adding one or more beneficiaries to your account and getting many of the benefits of this type of account over a JWROS account. To make sure you get your questions answered, schedule a consultation with an experienced estate planning lawyer.

 

 

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Joint Bank Accounts Can Be Problematic for Crises

Establishing joint accounts that are used by both children and parents can seem like the most effective way to handle financial emergencies or to step in if someone needs assistance with their finances as they get older.

But this can cause significant estate and tax planning problems and another strategy might be more effective.

Parents often consider adding their child to their bank account in case something happens to them and the primarily goal of a parent who intends to do this is to give children access to finances during an emergency.

Many parents, however, need to know that simply making the child a joint owner of a bank account can have significant unintended consequences and can be especially problematic during a family crisis. Many banks set up these joint accounts as joint with rights of survivorship. This means that upon the death of either one of the owners, the assets automatically transfer to the surviving owner. This can create a couple of different problems.

First of all, if the intent was for the assets still inside the account need to be distributed via a will’s terms, this will not happen. Furthermore, adding anyone other than a spouse could lead to a federal gift tax issue and if a parent adds a child to a major savings accounts and the child passes away prior to the parent, then half of that account value could be incorporated into the child’s estate for estate inheritance tax purposes.

In certain locations around the United States, this could trigger significant estate taxes paid at the state level and should therefore always be avoided whenever possible.

Scheduling a consultation with an experienced estate planning professional can help open your eye to the various challenges associated with using a joint account and determining whether other vehicles such as a trust might be more appropriate for your individual needs.

 

 

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More Financial and Estate Planning Professionals See Desire from Younger People

All generations can benefit from estate planning, but that doesn’t mean that all people seek out the support of estate planning lawyers and financial advisors as they should. Younger people are, however, seeing the benefit to planning ahead as they watch their parents and grandparents in retirement. 

The importance of the financial and estate plan has retained its place as a crucial aspect of planning for the future. A financial plan could even be more important than ever because of rising demand from young professionals about financial and estate planning guidance.

Plenty of financial advisors as well as estate planning attorneys are passionate about the overall importance of the financial plan. In fact, advisors say that when interacting with new clients, one of the first steps that they take is to write a comprehensive financial plan.

An estate planning attorney can be a valuable asset to turn to in answering many of the most common questions brought about by younger professionals who are looking to protect themselves now as well as to manage their wealth into the future.

Planning is a great way to ensure that all of the various professionals involved in your process, such as a financial advisor, an investment specialist, and an estate planning attorney are all on the same page in terms of understanding the current resources for your clients and how to most appropriately maximize resources to get specific long term and short-term goals.

Any prospects who do not have enough assets to consider becoming an investment client or protecting their wealth using asset protection plan or estate planning techniques can still benefit from some of the most basic tools available with regard to estate planning.

The establishment of a will can be important for passing on assets into the future but a plan for incapacitation, including a power of attorney and other similar documents, can help to address many common questions and concerns that can emerge in the event that someone were to become suddenly disabled and unable to take care of themselves.

In all of these situations, the support of an estate planning lawyer is instrumental in assisting with a holistic approach to the estate planning and individual asset protection planning process. Younger professionals today are working to amass more wealth than previous generations, which means that more of them are turning to estate planning advisors and investment professionals to get support.

 

 

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Early Inheritances: Are They Right?

Does it make sense to give an early inheritance to your kids.  Remember that giving financial gifts to your children should be done only when you have the support of an experienced estate plan lawyer who can walk you through the various consequences and benefits of doing so.  It can be very satisfying to make a financial gift to your children now rather than in your will.

But don’t forget to include all the of the different and most important factors.  The current estate planning tax exemption for giving can be split between gifts made through your will and gifts made during your lifetime.  You’ll need to evaluate how much you might be able to afford now without jeopardizing your own retirement.  And rather you intend to treat all of your children or beneficiaries the same way at the same time.

Giving a financial gift now might make sense for one of your children who needs assistance the most.  If you’re in a position to help your children financially, you’ve probably already been thinking about leaving them gifts in their will, but will help with real-life needs that pop up now be more effective?

Giving now rather than later is a preferred approach for many people who consider themselves financially comfortable.  In fact, a Merrill Lynch retirement study found that more than 3/4 of retirees felt it was better to pass on inheritance while they were still alive.  This requires careful evaluation of whether giving to one child now requires giving to all and the possible impact of overgiving.

Don’t forget that certain members of your family might not be capable of managing a big inheritance in the same way.  This means that you should establish a trust or another estate planning tool to help ensure that they are appropriately protected and you can minimize the possibility of them squandering resources.  A trust is another way to help protect against the concern of outside predators like a creditor being able to access that inheritance as well.

 

 

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What’s Next on Your Retirement Planning List?

You’ve probably been intending to retire your entire life, but have you really considered your day-to-day actions and how they can contribute towards your overall retirement plan and goals?

The support of an experienced estate planning lawyer is instrumental as you get closer to retirement because it is likely you will have numerous different questions and issues that must be addressed in line with your retirement. Thankfully, there are ample tips that you can implement into your daily life to ensure that you are ready for retirement when it comes.

As you get closer to seeing retirement into your own view, sharpen your focus on your retirement goals. It’s a good opportunity to revisit your retirement plan and to figure out where you stand. If you’ve gotten off track in recent years, take action to get back on it, whether this is contributing more to your savings, tighter budgeting, or a combination of both.

Catch-up contributions can be powerful for boosting your retirement savings BlueCross they allow you to contribute additional money to your 401k or your Roth IRA. Adjust asset allocation to changing circumstances. You might need to evaluate asset allocation on a periodic basis whenever you achieve a milestone in your life such as the birth of a new child or getting married.

Make sure that you have a Social Security and retirement date strategy. You cannot afford to overlook these opportunities because how you adjust your estate planning and retirement planning date with Social Security can have significant impact on your future and can make things much easier for you when you have the full picture of how your life will be affected.

Retirement doesn’t have to be difficult- but you do have to plan for it. Bringing in the right team of professionals will help you target all your top retirement goals and ensure you stay on track.

The support of an estate planning lawyer is helpful in this situation because many people overlook the various aspects of how their estate plan and their retirement plan do indeed work together. Schedule a consultation with an experienced estate planning attorney today to learn more.

 

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