One of the biggest wealth transfers that the United States has ever seen will take place in the coming 25 years. This is because it is anticipated that up to $68 trillion of wealth will be passed from current to future generations. This presents you a unique planning opportunity, but this requires those responsible for the funds and assets now to be forward thinking and proactive planning.
Taking a couple of planning steps now, being mindful of the possibility of disabilities, and other issues can enable you to create an estate plan that protect your loved ones needs and saves them thousands in taxes and legal fees while decreasing the possibility of delayed estate issues. One of the most common and easily avoided estate planning mistakes is failing to properly designate beneficiaries. This can be overlooked when you are first setting up your retirement plan or switching to a new investment company.
Make sure that every retirement plan, life insurance policy and brokerage plan has accurate and updated beneficiaries associated with it. You can easily set up bank deposits like savings accounts and CDs and fail to neglect a beneficiary. It’s easy enough to add a transfer on death designation which allows this account to simply bypass probate and go directly to your beneficiaries.
Be mindful of the potential pitfalls of naming a minor as a beneficiary. You can instead list a guardian for the minor child inside your will, meaning that person is also appointed to manage any investments or property that the minor inherits until they achieve 18 of 21.
If you have established a trust, make sure that you follow through with funding it and have a consultation with an experienced estate planning attorney about your tax situation now and your anticipated tax situation in the future.