Creating, reviewing, and updating your estate plan can seem like a big task but our experience shows it is a much harder problem if left unattended.
Two Significant Estate Problems you Want to Avoid:
1. Not Accounting for the SECURE Act
The SECURE Act was officially enacted on January 1, 2020. One of the major changes is that it largely eliminates the “stretch IRA” (with limited exceptions). If the owner of a retirement account dies and the beneficiary is not their spouse, then the beneficiary will generally be required to spend down the inherited account within 10 years following the death of the IRA owner.
Some of our married couples list their spouse as the primary owner and their trust as the contingent owner. If the IRA owner and their spouse die, then the trust becomes the beneficiary. Due to the changes in the law, trusts have a unique situation with possible significant unintended consequences.
We encourage our clients to talk with their estate attorney to ensure that the language of their trust is updated and appropriate for this situation. Let’s coordinate a call to make sure your estate plan is up-to-date if we haven’t done this already.
2. Not Establishing and Keeping your Estate Current
We had several clients pass away in 2020 with no living trust, or with an out-of-date living trust. It can be a long and slow process when an estate needs to go through the probate court. With the pandemic, this is even slower than normal.
We recommend clients work with their attorney to make sure their living trust is established, and current, to be able to avoid the probate court, if possible.
Make it Easier for Those you Care About
The purpose of a current estate plan is to make things easier for those you care about, not harder. A little energy now can go a long way for your peace of mind and the security of your family.
We are here to help too! Our Financial Journey Partners clients have a personal financial portal that is a tool for them to gather and store their estate plan and living trust documents and share a secure space with their attorney. We encourage you to update or create your estate plan and if you need help or a second opinion, contact us and engage your financial advisor. We want to be your partner on your financial journey.