Five Surprisingly Common Planning Mistakes Baby Boomers are Making in Droves
Baby boomers – the first generation tasked with the responsibility of planning for and funding their golden years. This generation, which includes those born between 1946 and 1964, have entered and continue to enter into retirement. As they make this financial transition into retirement, many are learning that they have made some of the most typical retirement mistakes.
But, even if you’ve made a financial mistake or two, there’s still time to avoid these five surprisingly common planning mistakes baby boomers are making in droves.
Mistake #1: Believing Estate Planning is Only for the Wealthy: While baby boomers are not the only ones guilty of this mistake, the common misconception is that only the ultra-rich need to have an estate plan prepared. By some reports, about half of Americans between the ages of 55 and 64 do not even have a will. Because estate planning encompasses not only protection of your assets (regardless of how much you’ve accumulated), but also your healthcare choices, the lack of planning can leave you in a dire situation should any medical issues arise.
Mistake #2: Checklist Mentality: For many, estate planning is just the preparation of legal documents. Once the documents are signed, the client crosses off the item from his or her to-do list and moves on. But, your circumstances may (and usually will) change. And the likelihood of this happening increases the longer time goes by. To ensure your estate planning objectives are carried out, you should update your estate plan every time a major (or minor) life change happens, such as retirement. At Levy & Associates, P.A., we recommend reviewing your estate plan every year, and offer to review client’s estate plans with them to make sure what has previously been drafted continues to meet their goals and desires.
Mistake #3: Not Completing Your Estate Planning Homework: Just because the estate planning documents have been signed does not necessarily mean that the planning is complete. It is important that any assets that need to be retitled are done so as soon as possible, before you forget. If the ownership or designations on financial accounts and property do not align with your estate planning strategy, there can be major problems in the future. Improper titling of financial accounts or property can result in an unexpected or undesirable distribution. This can happen because you may make one plan through your will or trust, but the ultimate determination of who inherits will rely on the ownership or beneficiary designation of those assets upon your death. Attorneys Vicki Levy Eskin and Brett Bevis provide clients the information to make sure their estate plan meets their needs, and inform clients how to properly designate beneficiaries on assets that may pass outside of their estate plan.
Mistake #4: Leaving Out Little (And Not So Little) Things: It is important to consider all forms of property, not just the high-value assets when putting together an estate plan. Some of the most commonly overlooked assets include digital assets and family pets. Attorney Vicki Levy Eskin assisted in drafting the Fiduciary Access to Digital Assets that was recently enacted in the state of Florida, and understands the value of planning for these increasingly common and valuable assets. If not expressly addressed in your estate plan, your family may end up fighting over valuable assets, abandoning those they deem worthless, or not even realizing certain assets existed.
Mistake #5: Not Preparing for Life Events & Emergencies: No one has a crystal ball. However, with proper estate planning, you may be able to weather the storm brought on by some of life’s unexpected events or emergencies. With long term care costs increasing year after year, planning for the future possibility of a nursing home can save you money and reduce worry if the time comes.
Estate Planning Help
Although many baby boomers have made these mistakes, you do not have to be one of them. Consult with Central Florida estate planning Attorney Vicki Levy Eskin or Brett Bevis to learn about estate planning options and to make sure you and your family are protected from these common mistakes. Contact us and set up an appointment to speak with one of our Attorneys at 407-321-4844.
After Tax Reform, Is Estate Planning Still Necessary?
The new tax legislation raises the federal estate tax exemption to $11.2 million for individuals and $22.4 million for couples. The increase means that an exceedingly small number of estates (only about 1,800, nationally) will have to worry about federal estate taxes in 2018, according to estimates from the nonpartisan congressional Joint Committee on Taxation.
So, you may be wondering, is estate planning even still necessary?
To put it simply: Yes!
Comprehensive estate planning does a lot more than guard against you owing federal estate taxes. Other than taxes, you and your family likely face a range of estate planning challenges, such as:
- Distribution of your assets. Create your legacy with the help of tools like a trust and/or a last will and testament.
- If you die without a will, state intestacy laws determine where your stuff goes. You lose control, and the people closest to you may feel hurt or may suffer financially.
- If your estate plans do not include asset protection strategies, your lifetime of hard work and savings could be squandered needlessly.
- Cognitive impairment. Dementia, Alzheimer’s disease or other disorders could make handling your own affairs impossible or at least ill-advised. Executing a durable power of attorney (POA), for instance, allows you to choose a person, referred to as an agent or attorney-in-fact, to step in and manage your financial affairs on your behalf. Without this arrow in your quiver, your fate will be left to the public whims of the court, which could appoint someone else—for instance, a public conservator.
- Medical emergencies. What if you become unable to communicate your preferences regarding medical care yourself? Naming someone as your health care power of attorney under a Medical Power of Attorney allows him or her to act as your voice for medical decisions. In addition, a living will or advance directive allows you to specify the types of life-sustaining treatment you do or do not want to receive.
- Specific family situations. Life is unpredictable. You need to consider (and proactively deal with) challenges like the following:
- If you have minor children, you can name a guardian for them and provide for their care through your estate plan. Without a named guardian, the decision of who raises your children will be left to the whims of a judge. Your children may even end up in foster care while the courts sort your affairs out.
- If you care for a dependent with a debilitating condition, provide for her and protect her government benefits using tools like the Special Needs Trust (SNT).
- If you’re married with children from a previous relationship, you need clear, properly prepared documents to ensure that your current spouse and children inherit according to your wishes.
Probate. Probate is the court-supervised process of the distribution of a deceased person’s assets. A veritable avalanche of paperwork awaits your loved ones. But it doesn’t have to happen to your family! Through proper planning, you can keep all of your assets—such as your IRA, life insurance and family residence—outside of probate.
Estate Planning Involves Much More Than Minimizing Estate Taxes
Even prior to the Tax Cuts and Jobs Act, relatively few Americans needed to worry about the estate tax. However, virtually everyone faces one or more of the issues outlined above. Shockingly, a 2016 Gallup poll found that 56% of Americans do not even have a simple will. A 2017 poll conducted by Caring.com found similarly alarming news—a majority of U.S. adults (especially Gen-Xers and Millennials) do not have their estate plans in order.
We can help you add yourself to the list of prepared Americans! Get in touch with our team to begin your plan today and get the peace of mind you need.
Levy & Associates, P.A., Now Offers Title Insurance
Attorney Brett Bevis recently completed the required training to issue title insurance and oversee real estate closing transactions. Levy & Associates, P.A., is proud to work with Attorney Title Fund Solutions, LLC, and Old Republic National Title Company.
Attorney Bevis will oversee all aspect of real estate closings and title insurance, so clients have the peace of mind that comes from knowing an attorney is directly involved every step of the way. Attorney Bevis and Levy & Associates, P.A., are excited to provide this service to our clients in Central Florida, including Seminole, Orange and Volusia Counties.
For more information, contact Attorney Bevis today.
ATTORNEY ESKIN TO SPEAK AT NBI WEBINAR:
ESTATE AND TRUST ADMINISTRATION MADE SIMPLE
Date: Wednesday, October 11, 2017
Attorney Eskin has been invited to lecture at an upcoming National Business Institute Webinar, Estate and Trust Administration Made Simple. This webinar is designed for attorneys new to estate administration and provides a comprehensive overview of estate administration. Mrs. Eskin will be presenting an overview of the steps of the estate administration process, distribution and closing of the estate, and ethics and estate administration.
The webcast is scheduled for Wednesday, October 11, 2017. For more information click the following link: Estate and Trust Administration Made Simple
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The information you obtain at this site is not, nor is it intended to be, legal advice. You should consult an attorney for advice regarding your individual situation. We invite you to contact us and welcome your calls, letters and electronic mail. Contacting us does not create an attorney-client relationship. Please do not send any confidential information to us until such time as an attorney-client relationship has been established. Levy & Associates does not represent you unless you complete an intake form and until a representation agreement is signed by you and by one of our attorneys.