Estate Planning
Most people when the think about estate planning naturally contact their attorney to prepare a will, maybe a living trust, possibly a living will, and a power of attorney. Once they have completed these basic documents, they feel relieved because the task is completed. What they do not realize, is for most people the basic will only manage a portion of their estate. Many people today have the bulk of their assets in qualified plans. Otherwise known as 401(k)s, 403(b)s, deferred compensation, or IRAs. Each of these types of accounts have their own beneficiary designations, and no matter what the will says, the beneficiary designation supersedes their will. Which means that even if their will says they want their IRA to go to their kids, it may in fact pass to their ex-wife. This is because when they originally established the account, they named their wife beneficiary and after their divorce never took the time, or knew how to go back and change that beneficiary.
To make matters even worse, in recent years their has been changes to how their heirs may receive the asset. If the individual never took the time to properly set up the beneficiary on their IRA, their heirs may receive the entire amount at once, as income in the year in which they receive it. Often times, when added to the beneficiaries current income, the beneficiary's tax rate jumps up to some of the highest federal tax rates. Even worse yet, the individual may have maintained the assets in their employer provided retirement plan, and the beneficiary has very little choice in the matter.
Freedom Financial Wealth Management can help. We will take the time to review your assets, and their beneficiary designations to make sure they truly align to the your intentions. We do this by working with your attorney, or if you do not have one help you find one.
Contact Us today to get started.