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Something I hear so often, but I have had no-one come to my office that has said that they have EVERYTHING taken care of!
People who THINK they have everything taken care of have talked to their attorney and think the legal documents they have are all they need to do. So, what else might be needed in this case? Remember, we are not attorneys and don’t offer legal advice but refer that work to a qualified Estate Planning attorney!
So many times, we see people who have gone to an attorney for Power of Attorney and that’s what they get! Just the Power of Attorney. They also need a will and living will or Physician’s Directive. Sometimes they need a Revocable trust and for a few an Irrevocable trust.
Many times we review their documents and find that the Power of Attorney needs to be changed because it didn’t have certain language in it that could potentially tie the hands of the agent (person) you want to act on your behalf!
Does your Will match your beneficiary designations on your 401k? IRA? Life and Annuity policies? POD, TOD, ITFs on your bank and brokerage accounts? Did you know that the Will doesn’t have any power over any accounts with a beneficiary designation?
Plus, a lot more potential ‘Misses’ we find.
Something else to think about if EVERYTHING is TAKEN CARE OF….
Is your Attorney or CPA licensed to talk about money or insurance AND taxes? Probably not!
Does your (any advisor) understand the cost of care as you get older? The cost of Independent Living, Personal Care, Assisted Living, Memory Care, Skilled Nursing Homes, or In Home Care? Probably not.
How can someone work on a quality retirement/estate plan without Fully understanding these costs and expenses in retirement!
Fidelity did a study this year…they found that the average cost of healthcare for a retired couple is $315,000! And…that doesn’t include the cost of Long-Term Care in the facilities mentioned above! That additional cost for Skilled nursing can be $11,000+/month or for 27/7 non-medical in-home care could be as high as $21,000+/month!
Do you have a plan in place to address these costs?
Many people have idle money sitting around that could be leveraged to help with the cost of care, make a fair return, and be accessible if emergency funds are needed!
Avoiding Probate is another issue we see, that may be an option to you. Probate expenses we see average around 5% of the value of the estate. Add in Inheritance taxes (to the kids) and you could be at almost 10% of the estate value paid to a beneficiary you didn’t plan on including! Proper planning could reduce or eliminate probate, but usually is missed. Siblings, nieces and nephews and everyone else is at 12-15% plus probate expenses.
Did you know that Inheritance Taxes are Optional if you plan properly? PA inheritance taxes are between 4.5% and 15% of the estate value…A properly planned estate can reduce or eliminate these taxes, but you need to act now! There are time limitations to being able to act.
What about reducing or eliminating future taxes on your 401k’s, IRA’s or other retirement money? Taxes can reduce your legacy by up to approximately 54%! Did you know even though you didn’t include Uncle Sam as a beneficiary on your retirement accounts…he is there anyway? Your family get’s what is left over after they get their tax share (and the attorneys get their share) of your intended legacy. There are several options to reduce the tax and probate costs of your retirement accounts while you are alive and after you are gone!
Unfortunately, there is only so much room to share this kind of information in this article! If you have any questions or would like to set up an appointment to go over your situation, please don’t hesitate to call us at 724-837-3553!
Take care,
Kevin E Bock, CSA
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