Estate Planning and Retirement

Estate Planning and Retirement Planning

By Matthew A. Ferri, Esq.  Estate planning and retirement planning are often thought of as independent tasks.  However, estate planning and retirement planning are intricately linked together.  In order to work as you intend, your estate planning and retirement planning must be coordinated together.  As you prepare for retirement, or if you are already retired, working with estate planning professionals can be incredibly beneficial.  It can help you avoid potentially costly mistakes.  Estate planning attorneys can ensure various considerations and protections are in place. Your plan should be personalized to you, in order for it to work the most efficiently.

This can include having a revocable trust with a tailored definition and determination of disability, so you stay in control. It can also include ensuring your beneficiaries inherit what you want, in the way you want, when you want. Putting protections in place for inheritances can prevent future creditor, predator, and tax issues. For example, you can make sure a beneficiary who is not financially responsible receives education on investing from a financial advisor before he inherits.

You could also have provisions in place in case a beneficiary divorces after your death, so their outlaws do not receive your hard-earned money. Similarly, you can include remarriage provisions, so your intended beneficiaries are the ones who inherit. Furthermore, you can put special needs trust provisions in place to protect beneficiaries who require that kind of assistance. By being proactive, estate planning attorneys can advise you how to remain in control and achieve protections for your family.

Estate Planning Attorneys, Financial Advisors, and CPAs

Estate planning attorneys can also work with your financial advisors or CPAs to ensure your plan accomplishes your fiscal goals. While preparing for retirement a revocable trust can and should be optimized regarding estate, gift, and capital gains taxes. Experts can ensure you’re protecting as much of your nest egg as possible for your enjoyment and passing to beneficiaries. They would make sure to consider various tax strategies based on current regulations, so your plan continues to work for you.

Additionally, having a team of professionals on your side as you near retirement would make sure your plan includes managing Social Security, pension, and retirement account assets. This is for while you are alive, if you become disabled, and after death as trustees distribute your assets. Funding these accounts into your plan can help during transition phases so you and your loved ones are able to handle step ups in basis or required minimum distributions and your plan still works how intended.

Approaching Retirement

Approaching retirement can provide an ideal time to review your plan if you have one and update it as needed. You should check that your estate plan includes any life changes. For instance, if you had a new grandchild and wanted to contribute to their education or leave them a sum of money, that could be included. Or, if you went through health changes you should make sure your power of attorney for healthcare decisions and any advance directives you have in place reflect how you currently feel about medical decisions to give your loved ones the best guidance. Also, if you are thinking about moving when you retire, you should make sure your plan works your new state’s laws.

Finally, as you approach retirement it is also a great time to think about what you have learned over the years and how this can be incorporated into your plans. Creating an estate plan is more than just leaving wealth behind to your loved ones.  You should be able to leave a legacy as well. Helping instill wisdom on your beneficiaries and sharing your experiences can help your loved ones navigate stressful times  and feel more connected to the family. Passing your family legacies to the future generations can help reinforce your core beliefs.  It can extend your traditions to let your values be passed down throughout the years to come.

Start Planning Now!

Retirement is meant to be a time for you to enjoy the fruits of your labor. You shouldn’t have to worry about how you will be taken care of, potential familial disputes, your loved ones getting frustrated by the probate process, or any of the other complications that can be involved in estate planning. To hear more about our process and how our plans could benefit you contact us for a complimentary initial consultation.  You can schedule a free consultation here, or contact us by phone (248) 409-0256.

Matthew A. Ferri, J.D., M.B.A., is the Founder and Principal of Life Focus Planning, a Michigan based estate planning law firm.  He is an estate planning attorney with offices in Bloomfield Hills, Michigan and Shelby Township, Michigan.