Estate Planning

Thinking About Legacy

thinking about legacyOur energy and passions are often focused on personal achievement, financial success and building a life during our 20s, 30s and 40s. Though we also spend time giving back to our families and our community in different ways, something seems to happen when we reach our 50s and 60s. We begin thinking about legacy.

Author David Brooks calls this the second mountain in his latest book titled the same. He explains how early in our lives we spend our time climbing the first mountain, expending most of our time and energy striving for professional and financial success.

Sometimes, we fall down the mountain, into the valley.  In that space, we may experience isolation and sadness. Perhaps we lose a loved one, or feel a lack of purpose or connection to others. Once we discover what we believe to be missing, we begin to think about ascending that second mountain.

“Here we can discover greater fulfillment and joy very different from that First Mountain,” Brooks writes. “We begin contemplating the legacy we want to leave our loved ones and our community, by making the world a better place in a small or big way.”

If you find yourself in that place and want to begin climbing that second mountain, make time for some self-reflection.

Here are questions to ask yourself when thinking about legacy:

  • Who are the people most important to me? How am I showing up in their lives?  Am I supporting them and sharing what I’ve learned to improve their lives?
  • What stirs my passions? What experiences, both personally and professionally, have motivated me to help, support and connect with others? What talents can I share?
  • How do I want to be remembered? How can I align my time and resources to what reflect who I am and what matters most to me? How do I want to be remembered? How can I align my time and resources to what reflect who I am and what matters most to me?

There’s no better way to enable our legacy to live on, than to spend time and resources on the people and causes closest to our hearts.

By |2020-02-13T13:01:57-07:00February 24th, 2020|Books, Estate Planning|

Retirement Savings Legislation 2020

Retirement Savings Legislation SECURE Act 2020The broadest piece of U.S. retirement legislation since the 2006 Pension Protection Act took effect January 1, 2020. The Setting Every Community Up for Retirement Enhancement (SECURE) Act was passed by Congress and signed by President Trump in December. The most immediate impact of this new retirement savings legislation will be felt by those nearing or in retirement.

RMD Age Increase

Prior to SECURE, retirees were required to start withdrawals at age 70½ years from traditional Individual Retirement Accounts (IRAs) or employer-sponsored retirement plans like 401(k)s. For those who haven’t reached 70½ by the end of 2019, the Required Minimum Distribution (RMD) now  must begin at age 72. That means 18 more months to grow investments before taking distributions and paying taxes.

The change also provides two additional years for Roth IRA conversions without having to worry about the impact of RMDs. Unlike a traditional IRA, Roth withdrawals are tax-free as long as you meet certain requirements and there are no RMDs during your lifetime. The general goal of a Roth conversion is to move taxable money from an IRA into a Roth at lower tax rates today than you expect to pay in the future.

Estate Planning Snag

A drawback of SECURE is removal of so-called “stretch” and “pass-through” provisions for retirement accounts beneficiaries. Formerly, if an IRA or 401(k) was left to a non-spouse or trust, the beneficiary could typically stretch out the tax benefits of the account over an extended period. With the new retirement savings legislation , however, beneficiaries will have to distribute the entire inherited account within 10 years after the owner’s death (there are a few exemptions).

Accelerated distributions mean more taxable income at potentially-higher rates. Such income may also affect means-tested Medicare premiums and Medicaid benefits of low-income retirees or individuals with special needs.

We encourage you to talk with your financial planner about reviewing your retirement accounts and estate plans to ensure they still align with your goals and that you’re taking full advantage of the new opportunities.

By |2020-01-17T09:47:35-07:00February 10th, 2020|Estate Planning, Retirement, Taxes|

Understanding Probate

understanding probateAn individual’s will designates how personal assets should be distributed to beneficiaries upon death. A revocable trust enables the smooth transfer of those assets. Without a trust, if assets are titled solely in the decedent’s name, the estate must be funneled through the probate court. Understanding probate can go a long way in alleviating stress during an already difficult time.

Probate is the court-supervised process that transfers assets of someone who has passed away to the rightful beneficiaries. Depending on the complexity of the estate, the process can last roughly six months to two years. There are financial costs associated with probate, such as attorney and appraisal fees. These expenses can be hefty depending on the size of the estate.

Understanding Probate

Here are the typical steps of the probate process.

1) A petition is filed to open probate and a personal representative is appointed by the court.

Even if an executor was named in a will, before probate can begin that person must be authorized by the court. Executor, administrator and personal representative are different titles used to describe the person who will be managing the estate.

2) Notice of the death is given to potential creditors.

Any claims against the estate must be presented to the executor; there is typically a time limit within which a claim can be made.

3) Assets are collected and valued.

The executor needs to take inventory of and properly appraise the decedent’s assets before determining how and to whom they will pass.

4) The estate is managed by the executor.

This process includes opening an estate checking account to pay bills, maintaining investments and real estate, and filing appropriate income tax returns.

5) Remaining assets are distributed.

Once debts, expenses and taxes have been paid, the executor must distribute any remaining assets according to the decedent’s will. In the absence of a will, assets are distributed according to the state’s probate laws.

 

By |2019-09-16T19:35:29-07:00September 23rd, 2019|Estate Planning|

Your Digital Legacy

your digital legacyDoes anyone truly die in the 21st century? The Internet is an integral part of our lives. Online banking, social media, a digital library of movies, books and music, email, photos stored in the Cloud – we all have accounts and an Internet presence that we don’t think much about unless we are hacked. When people die, pieces of them and their digital assets remain online. Your digital legacy adds yet another layer to your estate planning.

In this new reality where online life and the physical world blur together, it’s important to think about how your digital assets and legacy will be handled when you pass away. With most websites requiring a password change every few months for security, even a written record can become obsolete and make it difficult to access investments and outstanding bills. When it comes to social media, accounts are not owned by the user and cannot be passed down in a will. Still, there are a couple steps you can take to help simplify the process.

Protect Your Digital Legacy

Learn About Social Media Options: Every social media site handles a user’s death a little differently. Facebook has a legacy option, in which you can designate someone with the power to leave a final message to friends and family, archive photos, and provide updates. Instagram’s legacy feature does not allow changes to be made, however, the account will no longer appear in public searches. Pinterest, Snapchat, Twitter and LinkedIn will delete an account if provided proof of death by a family member.

Designate a Digital Manager: As part of your estate planning documents, designate someone you trust to manage your digital estate. Maintain an up-to-date a list of important online accounts, digital libraries and electronic devices, as well as your login information for each. Also provide your digital manager with the email address associated with them, which can help him or her gain access if passwords have changed.

Written by Alicia Vallee, a Phoenix-based freelance writer.
By |2019-08-19T10:05:48-07:00August 28th, 2019|Current Affairs, Estate Planning|

Estate Planning Insights

estate planning insightsMike McCann recently helped his dad through a difficult life transition – from having full independence to living in a memory care facility. There are several estate planning pitfalls people often encounter. His dad avoided all but one. In this brief video, Mike shares key estate planning insights he gained in the process.

Most importantly, he learned that communicating your wishes to your loved ones is critcal. It’s a step that should not be put off.

Estate Planning Insights

By |2019-08-14T13:59:44-07:00July 8th, 2019|Estate Planning, Video Blog|