Five Steps to Organized Financial Affairs for Estate Planning

Do you feel organized when it comes to your financial affairs and long-term goals? Most people don’t because they haven’t had the opportunity or understanding of how important these financial and estate planning considerations can be.

Thankfully, a few important steps can get you started on the path to financial planning and give you further motivation to complete the more advanced aspects of your long-term goals.

The five things you need to do in order to stay on top of your financial planning include reviewing any estate planning documents that might have been completed in the past to ensure that they are up to date and accurate:

• Review your next steps for your taxes to see whether your individual situation has changed. Not every tax strategy is appropriate from one person to another, so you need an experienced professional to help you.

• Consider aspects of risk management that go beyond insurance. Insurance is just one method of covering any risk. The importance of this process is in identifying risk and then deciding if you can assume that risk or if you need another way to manage it.

• Review your debt situation because it is extremely important to take every step possible to keep your debt under control.

• Ensure that your investment portfolio reflects your current risk tolerance level, overall objectives, and goals. In some, completing all of these financial goals and considerations can give you peace of mind as well as alert you to problems before they become escalated to the point of having to do crisis management.

Understanding that a financial planner and an estate planner can help you are often important components of your final decision to take the reins with your financial and estate planning.

Financial/Estate Planning Should Always Be Unique for Every Single Family Member

When it comes to looking towards a family’s future, every couple has to realize that their situation is often changing and also extremely unique. What works for some other family that you heard about in a recent conversation with a friend or even another family member, might not be suited to your individual needs. 
This why you need to have a sit-down consultation with an experienced estate planning attorney. Families will often have different financial priorities as they go through the various stages of their lives. For example, saving up money for a down payment on a house is often the first step on a financial planning to do list for younger couples. However, over time, parents eventually put more of their focus to establishing financial milestones for saving for their children’s college education or towards looking for their own individual retirement.
Financial advisors can play a crucial role in this process and these individuals are often included at the same time as working with an estate planning attorney. With so many different issues to address and concerns presented by those who are in these similar situations, it is essential to have the support of an attorney who will work as hard as possible on your behalf to craft a plan that is flexible and can change with you as your life needs change over time, while also keeping you aligned with your individual goals.
 
 

Mistakes Can Happen When You Focus Only on Money and Financial Planning

Money and financial planning obviously go hand in hand and estate planning must be added into the mix as well. However, being too focused on money can lead to your goals being missed. Social capital is equally important, which refers to a person’s ability to relate constructively to the world in which they live. People who have plenty of social capital are able to positively influence others.
Many of the people who have excellent social capital are those who are quieter souls, who are those who simply inspire those around them to live better lives. You can probably think of a couple of examples of people who have a great deal of social capital already because they engage in life and serve others.
These forms of social capital, in addition to the money that’s been set aside to influence your loved ones in the future, can help you to accomplish your goals and ensure that you are leaving a legacy behind for those who care about you. The good news is that mistakes in estate planning don’t have to be the norm. They can become a thing of the past.
Leaving behind a legacy can be complicated without the support of an experienced estate planning attorney.   
 

You're Close to Retirement. What Financial Planning Options Do You Have?

Retirement today is one of the most complicated subjects and also one of the most important, with a growing baby boomer population.
To help determine what type of financial advice is most applicable for you, it depends on where you are on the retirement spectrum. If getting closer to retirement, it is important to engage with a financial advisor and an estate planning attorney to verify what is in your best interests.
There are many different issues that a financial advisor can address, including when to file for social security, the most cost-effective methods for paying for health care including long term care, how to stay ahead of inflation without being exposed to too much risk and how to invest their nest egg appropriately.
A robotic advisor, which is becoming increasingly common in the marketplace today, may not be the right fit because there are many different needs that near-retirees face, and they’ll want to get personalized responses from an experienced professional. An overall picture must be reviewed in conjunction with your financial plan, because your estate plan and your financial plan often intersect and have important influences on one another.
 
 

What Young Entrepreneurs Should Know About the Estate Planning Process

Estate planning can often seem overwhelming for someone who is already involved in all of the various aspects of running a busy company. However, entrepreneurs and in particular, young entrepreneurs need to be mindful of how to engage in the estate planning process appropriately.
Estate planning and business succession planning, in conjunction with asset protection planning as the wealth of the entrepreneur and the company grows, are crucial components of having a long-range vision. Frequently, entrepreneurs are visionaries and dreamers but leave out the day to day aspects of conducting appropriate estate planning.
There are several different steps that can make this process easier and to ensure that the individual as well as the company’s needs are represented in appropriate estate planning documents and strategies. These include:

  •   Evaluating the current financial situation looking at professional income, debt, personal overhead, and any savings already accumulated.
  •   Identify a clear set of goals, including what you intend to accomplish in coming years such as spending more time with your family, expanding the business, traveling to destinations or building your dream home.
  •   Design a course of action that is in line with your current situation and your long-term goals. A game plan should be generated for every individual goal.
  •   Implement your game plan by deciding on specific actions that can help you achieve your vision.

Young entrepreneurs can dramatically benefit from the advice of an experienced lawyer in VA Beach.
 
 

What You Need to Know About Individual Retirement Accounts and Estate Planning

Individual retirement accounts, most commonly referred to as IRAs, can cause problems in estate planning if you do not manage them correctly. Most married people will put the spouse as their primary beneficiary on their IRA; however, they might not worry about the IRAs in the process of the estate planning since they already know they have established a beneficiary. This, however, could be a big mistake.
A little bit of estate planning established with the help of a knowledgeable attorney can go a long way towards resolving common challenges that arise if you were to suddenly pass away. If the primary beneficiary passes away before the owner and the IRA owner had not updated beneficiary designations or named a contingent beneficiary, the IRA will end up in the probated estate of the deceased individual and is subject to all of the formalities, delays and costs of a probate proceeding.
There are a couple of different options available to people in the process of estate planning including naming grandchildren, children or other non-spouse individuals as a beneficiary of your IRA to enable them to have a direct rollover of an eligible retirement plan to an inherited IRA. Another option is to name a trust as the beneficiary but this needs to be done with the help of an experienced estate planning lawyer.

Getting A Handle on Planning After the Birth of a New Baby

Congratulations on your newest addition. There are many different things to think about in the wake of becoming a new parent but one of the most important is putting an emergency fund. The U.S. Department of Agriculture shares that the cost of raising a child up to age 18 is more than $230,000 for a married couple of little income with two children. Your own financial house needs to be in order before you can provide for your children. A starter emergency fund of $500 or so can help you in the event that a sudden and small expense crops up.       
You’ll eventually want a bigger fund but it could take several years to get there. You will also likely need life insurance as well. Young parents will typically need up to 10 times their income in terms of coverage. You can boost your emergency and retirement savings until those accounts are on track. If you still have money left over after that, consider contributing to a 529 college savings account.
Furthermore, you will want to update all of your estate planning documents after welcoming a new loved one into your family. You’ll need to ensure that your will includes stipulations about who should step in in the event that you pass away to care for your minor child. A will is the only way to name such a person and it needs to be formally documented in case something ever happens to you and/or your spouse. Consulting with an experienced estate planning attorney is recommended.
 
 

Three Changes in Your Life That Should Prompt You to Schedule an Appointment with Your Estate Planning Attorney

Aged copule is falling out and cannot reach the agreement
There are so many different circumstances that should warrant a meeting with your estate planning attorney. As estate laws or your individual life circumstances change, it is appropriate to update your estate planning documents to ensure that they are in line with your intentions. What follows are three of the most common changes in your life that could prompt a meeting with an estate planning attorney.
First of all, if you intend to access your retirement savings, whether it’s your 401(k) or your IRA, you should update your estate plan if these assets have previously been included in your estate planning. The second common reason that you wish to update your estate plan has to do with changing trustees or beneficiaries.
In the event that you wish to revise any of this information due to a family dispute or whether one of the trustees has passed away, you will need all of your documents to reflect these changes.
Finally, significant changes in your healthcare or the health condition of your spouse may require that you update your estate plan. Health care costs can impact your assets, so it is a good idea to review documents with the help of an experienced estate planning lawyer.

Widows Face Special Issues In Financial Planning

Close-up of documents

Close-up of documents

Many older couples, those approaching or even well past retirement age, have wisely made financial plans for the rest of their lives together.
What few do, because it’s just too emotionally difficult in most cases, is make further plans for one or the other of them to carry on alone.
More often than not, it is going to be the woman who survives in a married couple, and women face much more difficulty in planning for a secure future, as noted in a recent article in The New York Times.
“The household income for widows typically declines 37 percent after a spouse dies, far more than the 22 percent income drop that men experience, according to government figures,” the story stated . “The assets of widows also tend to fall substantially more than widowers’.
“Women also typically live longer than men. One in four women from 65 to 74 are widows, according to census figures. When women reach 85, three out of four are widows.”
“Many people do not plan for income needs after the first death in a couple,” David Littell, program director of the American College of Financial Services, which offers financial education for securities, banking and insurance professionals, was quoted as saying. “And retirement planning is more of a struggle because life expectancy is longer.”
There is, however, some good news.
“Often neglected in the past, women are receiving more attention from banks and other financial institutions,” the article noted. “Regions Bank, which covers a 16-state area in the South and Midwest from its headquarters in Birmingham, Ala., for example, devotes a portion of its website to women and wealth management, with videos and other information.”
“More and more women control wealth,” said Amanda Weeks, a Regions private banker and wealth manager, “so they have to know their sources of income and how to manage their assets.”
“That includes figuring out when the mortgage will be paid off if it hasn’t been already, whether there is a pension plan or 401(k) for one or both spouses and whether there are other bank accounts or property. Often, one of the most complex issues is determining how to obtain the maximum payment from Social Security, a major income pillar for many older women.”
“When a spouse dies, it is an emotional time,” Weeks said. “It can take some time to find the information and make a plan. And everyone has their own timetable.”

Duties of Executors More Complex In Digital World

The roles of executors and their agents, which had remained largely unchanged for decades, are, like everything in this digital age, undergoing a transformation.

Financial data analyzing

Financial data analyzing

“Being named an executor by a family member or close friend is an expression of the highest regard and trust, and it is generally regarded as an honor,” according to a recent article on the website ustrust.com
But, like many honors, it brings with it significant responsibilities and, often, unexpected challenges. “Serving as executor is one of the most complex financial roles anyone can undertake. The responsibilities are extensive and often highly technical, and the commitment of time and energy can be daunting. The role demands custody, investment, fiduciary, administrative, accounting, legal and tax expertise and capabilities. Emerging issues related to digital property, not to mention increasingly intricate family structures, add challenges for the executor.”
The site goes on to point out that at one time the search for important documents relating to an estate was largely confined to a few filing cabinets in the home of the deceased or perhaps a safety deposit box at the individual’s bank.
“But today, important papers may have been sent and stored solely in digital forms, which can muddle the search for important information,” according to the piece by Chris Heilmann, chief fiduciary executive for U.S. Trust, and Colin Korzec, U.S. Trust national executive for estate settlement. “And, even if all of these digital locations are known, does the executor have current usernames and passwords to access the information?
“There are also potential legal issues, since most state laws are unclear as to an executor’s ability to gain access to a deceased individual’s digital property. User agreements for online services tend to be equally murky. What about access to email accounts? Can an executor access these accounts without violating the provider’s terms of use agreement? All this is really just the tip of the iceberg when it comes to grappling with digital assets as an executor.”
One solution for dealing with a particularly difficult and complicated situation, the authors suggest, is to find a co-executor so that the potentially cumbersome tasks can be shared out.