The Ultimate Guide to Creating an Estate Plan

Estate planning is probably the last thing you want to think about as you start your family.

You’re bringing life into the world, which is joyous and happy. But estate planning is all about what happens when life ends, which is morbid and depressing.

You may also think that estate planning is only for rich people. If you haven’t yet built up much savings, or if you’re still working your way out of debt, you might wonder whether it’s actually important to tell people what to do with your money.

The truth is that estate planning is both important and empowering, no matter how much money you have. And that’s especially true when you have young children, because your estate plan is how you ensure that your family will always be taken care of, no matter what.

In this guide you’ll learn everything you need to know about estate planning so that you can make sure your family’s future is secure.

Why You Need an Estate Plan

The main reason to create an estate plan is to make sure that your family will be taken care of both physically and financially after you’re gone.

Physically, you get to decide ahead of time who would take care of your children — and other dependents — if you and your spouse or partner are no longer able to do it yourselves.

Financially, you get to make sure that there’s money available for your children, and you get to decide who would be in charge of managing that money until they’re old enough to do it themselves.

In other words, your estate plan is how you get to keep being a parent after you die. Your kids will continue to be taken care of because you set it all up ahead of time.

And if that isn’t enough, Bomopregha Julius, an estate planning attorney in New York City, suggests two other reasons to create an estate plan:

  1. It’s really for your family, not for you. Whether you have an estate plan or not, your surviving family members will have to figure out what financial assets you have and what to do with them, all at a point in time when they’ll be grieving your death. By creating an organized estate plan, you give them the tremendous gift of making that process as easy as possible.
  2. Build generational wealth. An estate plan is how you break the cycle of poverty and build generational wealth. By being intentional about leaving money behind to the people you care about, you create a stronger foundation for the next generation to build upon.

With that as your motivation, let’s talk about what goes into a good estate plan.

8 Key Components of a Solid Estate Plan

1. Your Will

A will serves two main purposes.

First, and most important, it’s the only place where you can name guardians for your children. This is why a will is essential for all young families, regardless of your financial situation.

Second, your will is how you pass on assets and possessions that don’t allow you to designate a beneficiary (more on beneficiaries below). Things like cars, furniture, and jewelry can all be passed down through a will.

The downside of a will is that it has to go through a process called probate. Probate is the court process of reviewing and executing your will, and it can be time-consuming and expensive. Family and friends can also challenge your will during probate, with the final decision up to the judge, which can lead to outcomes that may not be exactly what you intended.

For that reason, it’s usually a good idea to pass on as much of your money and possessions as possible through other avenues. Which brings us to…

2. Your Beneficiary Designations

Many bank and investment accounts, as well as life insurance policies, allow you to name beneficiaries or make payable on death designations. These designations allow you to specify who the money in those accounts would go to upon your death.

The benefit of these designations is that they allow the money to be transferred without going through probate, which means your family can get the money quicker, easier, and with more certainty.

You just need to be aware that these designations take precedence over anything you have in your will. That’s what allows them to skip probate, but it also means that updating your will often isn’t enough to keep your estate plan up to date. You need to make sure you keep your beneficiary designations current as well.

3. Life Insurance

Life insurance is one of the best ways to make sure that there will always be enough money for your surviving family members. This is particularly true when you have young children, since there is a long time between now and the point at which they’ll be able to support themselves.

Typically, both working and non-working parents should have at least some amount of life insurance.

For working parents, it primarily serves to replace lost income. For non-working parents, it helps the family pay to replace all of the duties they perform. And in all cases it can help the surviving family members navigate a challenging transition period without worrying about how they’ll pay their bills

Term life insurance is the type that most people need, but you can get a detailed breakdown of the options available to you here: Term vs Whole Life Insurance.

4. Financial Power of Attorney

A financial power of attorney designates someone to handle your finances in the situation where you’re temporarily incapacitated. This could, for example, allow someone to access your checking account and pay your bills.

You could set this up as a permanent right or you could make it conditional upon certain medical diagnoses. You can also limit which accounts the person is able to access and which actions he or she is able to perform.

Regardless, this ensures that your financial obligations can be handled even when you’re not able to do it yourself.

5. Health Care Power of Attorney

A health care proxy is essentially the same as a financial power of attorney, but for health care instead of finances.

It designates someone to be in charge of your medical decisions in case you’re ever not able to make them for yourself. Designating someone you trust as your health care proxy will make it easier for your doctors to care for you in a way that aligns with your personal values.

6. A Living Will

Your living will allows you to decide ahead of time how you’d like end-of-life decisions to be made. That might sound pretty morbid, but this helps ensure that you’re treated the way you want to be treated AND takes some of the responsibility off the shoulders of your family members to make some of those difficult decisions for you.

7. List of All Your Important Accounts

One of the most difficult jobs for surviving family members is often simply finding and accessing your bank and investment accounts. If they don’t know where they are, it’s pretty challenging to claim the money.

So at the very least, making a list that details which accounts you have at which institutions can eliminate a lot of the struggle. For some accounts, it may also make sense to securely share your username and password so that there’s always someone who can access them if needed.

8. A Written Summary of Your Wishes

While your estate plan should always be laid out formally using the tools above, it can also be helpful to provide a written summary of what you want to happen.

While it won’t be legally binding, it can help to explain your wishes in an easily understood format, which could make it easier for your survivors to execute your plan correctly.

When to Consider a Living Trust

While the eight items above are essential for any good estate plan, some people might also benefit from creating a revocable living trust.

A revocable living trust is a legal entity that you create and control. You can then transfer ownership of certain assets to the trust, and those assets are then bound by the terms of the trust, which specify how those assets should be disbursed upon your death.

For example, it’s common for spouses to create a living trust in which they are both trustees, meaning that they both have full access to all the assets owned by the trust and can modify the terms of the trust at any time.

Then they will transfer checking accounts, savings accounts, and non-retirement investment accounts to the trust. They can also name the trust as the beneficiary of their life insurance policies. And because they are trustees, they can manage those assets in the exact same way as if they owned them individually, with the difference being that those assets will now automatically pass to surviving family members according to the terms of the trust.

That might sound like a lot, and it may also sound redundant with the purpose of your will and your beneficiary designations. But there are two big benefits to this approach.

The first is that all assets owned by the trust skip probate. Probate can be a long and expensive process, and skipping it means that your money is passed on to your family members quicker, at a smaller cost, and with less chance for your desires to be overturned.

The second is that you have more control over certain decisions, such as when your children get access to your money. Instead of them inheriting your life insurance proceeds at age 18, for example, you can stipulate that they wouldn’t receive the money until age 25, when they might be better prepared to handle it. You can even put in provisions that protect the money from a messy divorce or from creditors. Trusts are flexible tools with a lot of room for you to set them up as you please.

The Cost

The big downside is the upfront cost. A will and all the other documents might cost anywhere from $50 to a few hundred dollars to set up, while a living trust will usually cost a couple of thousand dollars. The flip side is that it may actually save your family money in the long run by cutting out most of the probate process, but that doesn’t make it any easier to afford the bill now.

In general though, a living trust is a good idea if you can afford the upfront cost without sacrificing your basic financial security. It makes things quicker, easier, less expensive, and more certain for your surviving family members.

And remember that even if you don’t have much in the way of savings, your children might stand to inherit significant life insurance money. A living trust can make sure that that money is managed properly by the right people until your children are old enough to manage it themselves.

Hiring an Estate Planning Attorney vs. Doing It Yourself

Armed with all that information, there’s still one big question left to answer: how should you get it all in place?

It used to be that you had to go through an estate planning attorney, but as the world turns digital there are now a number of online tools that can help you get these documents in place quickly and inexpensively.

So which route should you take? Let’s look at the pros and cons of each approach.

The Pros and Cons of Doing It Yourself

There are a number of websites now that offer guided, DIY estate planning packages with all the essential documents. Some of the biggest are Nolo, LegalZoom, and Rocket Lawyer.

The biggest appeal of these tools is typically the cost. They currently range from $54.99 to $149 per person, which in some cases could be significantly cheaper than working with an attorney.

They’re also quick. Working with an attorney likely requires at least one in-person meeting, and often more to get everything handled, while the online tools might allow you to complete everything in just a couple of hours.

And for simple situations, many attorneys use a template similar to what these tools offer anyway, so you may not be getting a much different product.

The biggest downside is that you don’t get the guidance that comes from working with a good estate planning attorney. Given the importance of getting your estate plan right, that could be costly.

The DIY tools aren’t great for more complicated situations either, such as setting up a living trust or creating a plan for a second marriage. Those situations have more moving parts, and that’s where an experienced attorney can be very helpful.

The Pros and Cons of Hiring an Estate Planning Attorney

Working with an estate planning attorney has essentially the opposite set of pros and cons.

The biggest downside is simply the cost. It’s typically at least a few hundred dollars to work with an attorney, and it may be upward of $1,000. It really depends on where you live though, and even then there’s often a wide range, so it’s worth calling around.

The main reason to work with an estate planning attorney is for the guidance they offer. A good attorney will take the time to get to know you, to understand what’s important to you, and to explain all of the options available to you. The decisions you’re making are not always simple or easy to understand, so that kind of guidance can be invaluable.

Along with that comes the confidence of knowing that your plan is done right, both in terms of being set up the way you want and in terms of adhering to specific state laws that the online tools may or may not be aware of.

Similarly, your surviving family members may be in a better position to carry out everything with the guidance of the attorney who helped you create your plan and knows exactly what you wanted and how everything should work. Again, anything you can do to make things easier for your family is a huge gift.

Finally, working with an attorney may make it easier for you to make changes and updates as you move along, since he or she will already be familiar with your plan and have all the documents you originally created. So if you have a child, get divorced or remarried, or want to update the guardians in your will, your attorney can help you make those changes efficiently within the context of your overall estate plan.

Questions to Ask Before You Hire an Estate Attorney

Can you afford the cost of the attorney without sacrificing your financial security?

Can you find an attorney who cares about getting to know you personally and helping you craft a personal estate plan?

If the answer to both of those questions is yes, the cost of hiring an attorney is well worth it. Otherwise, the DIY tools are probably sufficient as long as your situation is relatively simple.

How to Find an Estate Planner

  1. You may have access to discounted legal services through your employee benefits.
  2. The National Association of Estate Planners & Councils has a search tool you can use.
  3. WealthCounsel is another organization that offers a helpful search tool.
  4. You can always simply Google “estate planning attorney” + your city/state to find one near you.

Where to Keep Your Estate Planning Documents

Once you have your estate planning documents in place, there’s still one big question to answer: where should you keep them?

This may sound trivial, but it’s actually pretty important. Remember, these documents tell everyone else how your family and your money should be cared for after you die, meaning you won’t be around to help them figure it out. So your main goals here are two-fold:

  1. Ensuring that there are always up-to-date copies stored somewhere.
  2. Making it easy for your surviving family and friends to access those documents if needed.

Here are a few options.

1.Your Attorney

If you work with an attorney, he or she will usually be able to keep a copy of all of your important documents on hand. This is a great way to make sure that those documents will always be available, even if something happens to your copies.

It’s also a good way to make sure that someone who knows what they’re doing is leading the way. Your attorney will already know who’s in charge of what and should be able to guide everyone else to make sure that things run smoothly.

2. A Safe

Even if you’re relying on an attorney, you’ll walk away with a number of physical copies of all your documents that you should hold onto in case originals are eventually needed. And it may be a good idea to keep them in a fireproof and waterproof safe, just to make sure they won’t get damaged in an accident.

3. With Friends and/or Family

Throughout the estate planning process, you’ll be naming a number of people who would be in charge of taking care of your children and handling your financial affairs if you die. You should already be talking these decisions through with them so that they know what’s expected of them, and it may also be a good idea to give them a copy of important documents so that they’re easily accessible if the need arises.

4. Digital File Share

Storing your files digitally using a service like Google Drive or Dropbox is a great way to make sure you always have backup copies, and it also makes sharing those documents with others easy.

You could also looked into a paid service like Everplans, which is specifically designed for storing and sharing sensitive estate planning documents. They also offer some customer support that may be helpful if you need a little guidance.

The Gift of a Good Estate Plan

If you’re like most people, you’ll probably procrastinate on putting your estate plan in place. It’s not an enjoyable topic, and it’s a cost that’s not easy to take on when you’re already paying for child care and everything else.

But a good estate plan is a gift, both to you and your family.

You get the gift of knowing that your family will be taken care of, no matter what. And your family gets the gift of having the transition period after your death be as easy as possible, giving them space to grieve and get their lives together without worrying about the financial side of things.

That’s the value of a good estate plan.

The post The Ultimate Guide to Creating an Estate Plan appeared first on MagnifyMoney.

Everything You Need to Know About Writing Your Will

Yeah, no one really enjoys the idea of writing a will but it is worth it (and maybe even easier than you think).

Whether we’re young and just starting life or older and approaching the end, we don’t want to think about our own death. Adding money to the mix only makes it worse.

But all adults need to think about what will happen to their financial affairs when they die. (These seven documents you should fill out before you die may help you get started.) Failure to do so could leave a mess for those who survive you and could cost them money.

So evaluate your estate planning and see if it’s adequate. (For the record, I am not an attorney and this is not meant to be legal advice. I have been a financial planner and often referred clients to get competent legal advice. This is meant to do the same.)

Understanding the Lingo

Let’s create working definitions for some commonly used terms. Estate refers to the financial and physical assets you own or partially own at the time of your death. Estate planning comprises the arrangements you make before your death to ensure your wishes are followed after death. A will is the most commonly used document to make your wishes known to those who survive you and any appropriate government authorities.

Estate Planning

Decide what you want your estate plan to do. You need to name someone the “executor” or boss of your estate. They’ll be responsible for executing your last wishes. An executor does not need to be a lawyer. Any adult with good judgment will do. Many people choose a family member, but you may decide you want someone outside the family like a lawyer or bank to do the job — the choice is yours.

Provide instructions on how to distribute your financial assets and physical property. You may want specific items to go to designated people. Or you may want to make it clear that certain people are to be excluded from any inheritance.

If you have children, specify who you want to raise them. Your kids will need someone to take care of them physically and manage their finances until they reach adulthood. Young children are often left financial assets in a parent’s estate.

Also, consider whether estate taxes could apply. If so, you may be able to take steps to reduce the tax burden your heirs will face.

Last Will & Testament

A will is a very specific document. It’s not a list of items with names next to them that you keep in your safe deposit box or a sticky note pasted on a silver tea service that you want to go to little Sally.

A will is a legal document containing certain elements required by state law. While none of these elements are difficult, failure to include them could invalidate the will. To complicate matters, each state has different requirements. Make sure your will is legal in your state of residence. It’s a good idea to have it rechecked if you’ve moved to a new state since it was written.

Many single adults think they don’t need a will. They’re often wrong. Without a will, it could take months to have someone assigned to sell a car owned by the deceased or pay any bills. There could be a problem finding someone to pay funeral expenses. Turns out, Americans are dying with an average of $62,000 of debt, so this is important. (One way to find out any debts you have or any other problems with your finances is by reviewing your credit. You can see a free snapshot of your credit reports on Credit.com.)

Another common misconception is that married couples can solve the problem by putting everything into joint accounts. Unfortunately, not everything can be titled jointly (think of jewelry or home electronics). Even if everything is held jointly, what happens if both spouses die in a joint accident?

Dying without a will can leave a mess. State law will determine the who executor will be and how your property will be distributed. That might not produce the results you want. For instance, in some cases law dictates that some inheritance goes to children before the surviving spouse.

A will is especially important for unmarried couples. State laws are a patchwork. Some states recognize a common law marriage just the same as one registered with the state. In other places, a lifelong live-in partner is accorded no more rights than a complete stranger.

State laws are also problematic for couples in a second marriage. You may think certain assets you brought into a second marriage should go to children from your first marriage. The state might think otherwise.

Bottom line? Just about everyone who has reached adulthood should have a will.

How Do I Write a Will?

Being frugal, it’s tempting to want to write your own will or buy a fill-in-the-blank form. Normally I encourage do-it-yourself efforts, but that could be a mistake in this case. If something isn’t done right no one will know until after you’re gone and can’t correct it. A small mistake could be costly. This might be a case where hiring a professional is good money management.

You can still shop around to save money. If you’ve already thought about what you want your estate plan to accomplish, you’ll reduce the number of hours the attorney will spend preparing your will, which can also save money.

Make sure your executor has access to a copy of your will when you die. They’ll need it as proof they can make decisions for you. Give them a copy of the will, or, if you’d prefer they not see it, give a copy to your lawyer and let the executor know who the lawyer is. Don’t put the only copy in your bank box. The bank will not let the executor enter just because they say they have the right. The bank will require proof, which will be locked in the box.

Unless your financial or personal affairs are complicated, planning your estate isn’t that expensive. Don’t leave a financial mess for your loved ones as their last memory of you.

This article originally appeared on The Dollar Stretcher.com.

Image: MartinPrescott

The post Everything You Need to Know About Writing Your Will appeared first on Credit.com.

Everything You Need to Know About Writing Your Will

Yeah, no one really enjoys the idea of writing a will but it is worth it (and maybe even easier than you think).

Whether we’re young and just starting life or older and approaching the end, we don’t want to think about our own death. Adding money to the mix only makes it worse.

But all adults need to think about what will happen to their financial affairs when they die. (These seven documents you should fill out before you die may help you get started.) Failure to do so could leave a mess for those who survive you and could cost them money.

So evaluate your estate planning and see if it’s adequate. (For the record, I am not an attorney and this is not meant to be legal advice. I have been a financial planner and often referred clients to get competent legal advice. This is meant to do the same.)

Understanding the Lingo

Let’s create working definitions for some commonly used terms. Estate refers to the financial and physical assets you own or partially own at the time of your death. Estate planning comprises the arrangements you make before your death to ensure your wishes are followed after death. A will is the most commonly used document to make your wishes known to those who survive you and any appropriate government authorities.

Estate Planning

Decide what you want your estate plan to do. You need to name someone the “executor” or boss of your estate. They’ll be responsible for executing your last wishes. An executor does not need to be a lawyer. Any adult with good judgment will do. Many people choose a family member, but you may decide you want someone outside the family like a lawyer or bank to do the job — the choice is yours.

Provide instructions on how to distribute your financial assets and physical property. You may want specific items to go to designated people. Or you may want to make it clear that certain people are to be excluded from any inheritance.

If you have children, specify who you want to raise them. Your kids will need someone to take care of them physically and manage their finances until they reach adulthood. Young children are often left financial assets in a parent’s estate.

Also, consider whether estate taxes could apply. If so, you may be able to take steps to reduce the tax burden your heirs will face.

Last Will & Testament

A will is a very specific document. It’s not a list of items with names next to them that you keep in your safe deposit box or a sticky note pasted on a silver tea service that you want to go to little Sally.

A will is a legal document containing certain elements required by state law. While none of these elements are difficult, failure to include them could invalidate the will. To complicate matters, each state has different requirements. Make sure your will is legal in your state of residence. It’s a good idea to have it rechecked if you’ve moved to a new state since it was written.

Many single adults think they don’t need a will. They’re often wrong. Without a will, it could take months to have someone assigned to sell a car owned by the deceased or pay any bills. There could be a problem finding someone to pay funeral expenses. Turns out, Americans are dying with an average of $62,000 of debt, so this is important. (One way to find out any debts you have or any other problems with your finances is by reviewing your credit. You can see a free snapshot of your credit reports on Credit.com.)

Another common misconception is that married couples can solve the problem by putting everything into joint accounts. Unfortunately, not everything can be titled jointly (think of jewelry or home electronics). Even if everything is held jointly, what happens if both spouses die in a joint accident?

Dying without a will can leave a mess. State law will determine the who executor will be and how your property will be distributed. That might not produce the results you want. For instance, in some cases law dictates that some inheritance goes to children before the surviving spouse.

A will is especially important for unmarried couples. State laws are a patchwork. Some states recognize a common law marriage just the same as one registered with the state. In other places, a lifelong live-in partner is accorded no more rights than a complete stranger.

State laws are also problematic for couples in a second marriage. You may think certain assets you brought into a second marriage should go to children from your first marriage. The state might think otherwise.

Bottom line? Just about everyone who has reached adulthood should have a will.

How Do I Write a Will?

Being frugal, it’s tempting to want to write your own will or buy a fill-in-the-blank form. Normally I encourage do-it-yourself efforts, but that could be a mistake in this case. If something isn’t done right no one will know until after you’re gone and can’t correct it. A small mistake could be costly. This might be a case where hiring a professional is good money management.

You can still shop around to save money. If you’ve already thought about what you want your estate plan to accomplish, you’ll reduce the number of hours the attorney will spend preparing your will, which can also save money.

Make sure your executor has access to a copy of your will when you die. They’ll need it as proof they can make decisions for you. Give them a copy of the will, or, if you’d prefer they not see it, give a copy to your lawyer and let the executor know who the lawyer is. Don’t put the only copy in your bank box. The bank will not let the executor enter just because they say they have the right. The bank will require proof, which will be locked in the box.

Unless your financial or personal affairs are complicated, planning your estate isn’t that expensive. Don’t leave a financial mess for your loved ones as their last memory of you.

This article originally appeared on The Dollar Stretcher.com.

Image: MartinPrescott

The post Everything You Need to Know About Writing Your Will appeared first on Credit.com.

Everything You Need to Know About Writing Your Will

Yeah, no one really enjoys the idea of writing a will but it is worth it (and maybe even easier than you think).

Whether we’re young and just starting life or older and approaching the end, we don’t want to think about our own death. Adding money to the mix only makes it worse.

But all adults need to think about what will happen to their financial affairs when they die. (These seven documents you should fill out before you die may help you get started.) Failure to do so could leave a mess for those who survive you and could cost them money.

So evaluate your estate planning and see if it’s adequate. (For the record, I am not an attorney and this is not meant to be legal advice. I have been a financial planner and often referred clients to get competent legal advice. This is meant to do the same.)

Understanding the Lingo

Let’s create working definitions for some commonly used terms. Estate refers to the financial and physical assets you own or partially own at the time of your death. Estate planning comprises the arrangements you make before your death to ensure your wishes are followed after death. A will is the most commonly used document to make your wishes known to those who survive you and any appropriate government authorities.

Estate Planning

Decide what you want your estate plan to do. You need to name someone the “executor” or boss of your estate. They’ll be responsible for executing your last wishes. An executor does not need to be a lawyer. Any adult with good judgment will do. Many people choose a family member, but you may decide you want someone outside the family like a lawyer or bank to do the job — the choice is yours.

Provide instructions on how to distribute your financial assets and physical property. You may want specific items to go to designated people. Or you may want to make it clear that certain people are to be excluded from any inheritance.

If you have children, specify who you want to raise them. Your kids will need someone to take care of them physically and manage their finances until they reach adulthood. Young children are often left financial assets in a parent’s estate.

Also, consider whether estate taxes could apply. If so, you may be able to take steps to reduce the tax burden your heirs will face.

Last Will & Testament

A will is a very specific document. It’s not a list of items with names next to them that you keep in your safe deposit box or a sticky note pasted on a silver tea service that you want to go to little Sally.

A will is a legal document containing certain elements required by state law. While none of these elements are difficult, failure to include them could invalidate the will. To complicate matters, each state has different requirements. Make sure your will is legal in your state of residence. It’s a good idea to have it rechecked if you’ve moved to a new state since it was written.

Many single adults think they don’t need a will. They’re often wrong. Without a will, it could take months to have someone assigned to sell a car owned by the deceased or pay any bills. There could be a problem finding someone to pay funeral expenses. Turns out, Americans are dying with an average of $62,000 of debt, so this is important. (One way to find out any debts you have or any other problems with your finances is by reviewing your credit. You can see a free snapshot of your credit reports on Credit.com.)

Another common misconception is that married couples can solve the problem by putting everything into joint accounts. Unfortunately, not everything can be titled jointly (think of jewelry or home electronics). Even if everything is held jointly, what happens if both spouses die in a joint accident?

Dying without a will can leave a mess. State law will determine the who executor will be and how your property will be distributed. That might not produce the results you want. For instance, in some cases law dictates that some inheritance goes to children before the surviving spouse.

A will is especially important for unmarried couples. State laws are a patchwork. Some states recognize a common law marriage just the same as one registered with the state. In other places, a lifelong live-in partner is accorded no more rights than a complete stranger.

State laws are also problematic for couples in a second marriage. You may think certain assets you brought into a second marriage should go to children from your first marriage. The state might think otherwise.

Bottom line? Just about everyone who has reached adulthood should have a will.

How Do I Write a Will?

Being frugal, it’s tempting to want to write your own will or buy a fill-in-the-blank form. Normally I encourage do-it-yourself efforts, but that could be a mistake in this case. If something isn’t done right no one will know until after you’re gone and can’t correct it. A small mistake could be costly. This might be a case where hiring a professional is good money management.

You can still shop around to save money. If you’ve already thought about what you want your estate plan to accomplish, you’ll reduce the number of hours the attorney will spend preparing your will, which can also save money.

Make sure your executor has access to a copy of your will when you die. They’ll need it as proof they can make decisions for you. Give them a copy of the will, or, if you’d prefer they not see it, give a copy to your lawyer and let the executor know who the lawyer is. Don’t put the only copy in your bank box. The bank will not let the executor enter just because they say they have the right. The bank will require proof, which will be locked in the box.

Unless your financial or personal affairs are complicated, planning your estate isn’t that expensive. Don’t leave a financial mess for your loved ones as their last memory of you.

This article originally appeared on The Dollar Stretcher.com.

Image: MartinPrescott

The post Everything You Need to Know About Writing Your Will appeared first on Credit.com.

5 Ways to Leave a Legacy With Your Life Insurance

A life insurance policy can change many different people’s lives, or even entire communities, after you’re gone.

Ask someone if they want to leave a legacy after they’re gone, and they’ll almost assuredly answer yes. Ask someone if they know how to go about accomplishing such a benevolent task, and they’ll probably say, “I have no idea.”

You might be surprised to learn there’s a simple solution: your life insurance policy.

The payout from a life insurance policy (called a death benefit) can be a legacy that far outlasts your time on Earth. And it’s not only for people who want to leave a legacy to their spouse and children.

So if you think life insurance isn’t for your particular situation, think again. A life insurance policy can change many different people’s lives, or even entire communities, after you’re gone.

1. Care for Your Immediate Family First

The greatest legacy you have is your family. And life insurance can help financially protect the people you love most from the unexpected. If you have people who rely on your income for their day-to-day lives, they’re the first people you should consider when deciding if life insurance is for you and how much coverage you need.

Your legacy can live on through a death benefit that can help pay off the family home, fund college educations and provide income that helps them continue to meet their financial needs if you’re no longer there.

2. Cement Yourself as the Cool Aunt or Uncle

Your nieces and nephews probably don’t need a life insurance policy from you to ensure their day-to-day financial needs are covered. Most likely, they are covered through their parents’ life insurance.

But naming your niece or nephew as a beneficiary of your life insurance policy is a profoundly sweet move that would cement you as the cool aunt or uncle.

Leaving nieces and nephews a nest egg could continue your legacy long after you’re gone. Life insurance proceeds can help you fund that backpacking trip through Europe or contribute to their college tuition as you always intended to do.

There are many uses for life insurance that could help your extended family, which should be considered if you always planned to do so. Just make sure that you have a conversation with your brother or sister to give them a heads up, set expectations and allow them to factor the money into their family’s overall financial plans.

3. Leave a Legacy to Your Favorite Charity

With the recent election, many social media newsfeeds have been full of photos showing friends and family marching, volunteering, donating and giving back to organizations and movements they are passionate about.

If this resonates with you as well, perhaps your legacy should be giving back to your favorite organizations. Life insurance can offer a way to ensure if you’re no longer around to donate or volunteer, you can still continue giving back and advocating for what you believe in.

One of the simplest ways to give back to a charity via life insurance is to name a trust as the beneficiary of your life insurance policy. Make sure the trust has specific instructions to give a certain amount of your estate to the charity if you were to die.

4. Set Up a College Scholarship in Your Name

Another way to use your life insurance payout in an altruistic fashion is to establish a scholarship at your alma mater. A scholarship is a profound way to have your legacy, and name, live on after you are gone.

Each college has different rules and guidelines for establishing scholarships. You should contact your chosen college’s development or advancement office for help with this. Typically, you need $25,000 or more to be able to endow a scholarship at a university. The college or university will usually invest the $25,000 with their current endowment pool and issue a $1,000 scholarship yearly based on the criteria you and the college establish.

Similar to donating a portion of your life insurance benefit to a charity, it’s simplest to name a trust as your beneficiary and ensure the trust has specific instructions for the donation. You can leave instructions in your will to set up a trust or foundation, but you run the risk of your heirs misinterpreting your intent. An estate attorney can help you set up a 501(c)(3) charity, foundation or trust to help establish, fund and award the scholarships.

5. Build a City Park or Playground

Love your city? Consider leaving a legacy by creating a small park or playground. You’ll typically need to check with your city council on proposed locations and projects. The council can be an excellent help in determining the city’s need, recommending parcels of land if you don’t already have some to donate, and helping to guide you through how to make a difference.

Communities are almost always in need of a safe place for children to play. But they often lack the funds to build the playground and then maintain it. Through a trust, you can allocate a certain amount of money to create a better environment for your community.

Leave a Lasting Legacy

Many of us dream of leaving an impact on our loved ones and communities that will carry on long after we’re gone. Aside from financially protecting your family, directing a life insurance payout for altruistic means is a surefire way to leave a legacy far beyond your years.

If you’re interested in alternative ways of using life insurance to give back long after you’re gone, it’s a good idea to consult an estate attorney who can help you make the best choice for your specific situation.

Image: Juanmonino

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Americans Are Dying With an Average of $62K of Debt

What happens to your debt after death? Learn how to keep creditors away from your family in a worst-case scenario.

You’re probably going to die with some debt to your name. Most people do. In fact, 73% of consumers had outstanding debt when they were reported as dead, according to December 2016 data provided to Credit.com by credit bureau Experian. Those consumers carried an average total balance of $61,554, including mortgage debt. Without home loans, the average balance was $12,875.

The data is based on Experian’s FileOne database, which includes 220 million consumers. (There are about 242 million adults in the U.S., according to 2015 estimates from the Census Bureau.) Among the 73% of consumers who had debt when they died, about 68% had credit card balances. The next most common kind of debt was mortgage debt (37%), followed by auto loans (25%), personal loans (12%) and student loans (6%).

These were the average unpaid balances: credit cards, $4,531; auto loans, $17,111; personal loans, $14,793; and student loans, $25,391.

That’s a lot of debt, and it doesn’t just disappear when someone dies.

What Does Happen to Debt After You Die?

For the most part, your debt dies with you, but that doesn’t mean it won’t affect the people you leave behind.

“Debt belongs to the deceased person or that person’s estate,” said Darra L. Rayndon, an estate planning attorney with Clark Hill in Scottsdale, Arizona. If someone has enough assets to cover their debts, the creditors get paid, and beneficiaries receive whatever remains. But if there aren’t enough assets to satisfy debts, creditors lose out (they may get some, but not all, of what they’re owed). Family members do not then become responsible for the debt, as some people worry they might.

That’s the general idea, but things are not always that straightforward. The type of debt you have, where you live and the value of your estate significantly affects the complexity of the situation. (For example, federal student loan debt is eligible for cancellation upon a borrower’s death, but private student loan companies tend not to offer the same benefit. They can go after the borrower’s estate for payment.)

There are lots of ways things can get messy. Say your only asset is a home other people live in. That asset must be used to satisfy debts, whether it’s the mortgage on that home or a lot of credit card debt, meaning the people who live there may have to take over the mortgage, or your family may need to sell the home in order to pay creditors. Accounts with co-signers or co-applicants can also result in the debt falling on someone else’s shoulders. Community property states, where spouses share ownership of property, also handle debts acquired during a marriage a little differently.

“It’s one thing if the beneficiaries are relatives that don’t need your money, but if your beneficiaries are a surviving spouse, minor children — people like that who depend on you for their welfare, then life insurance is a great way to provide additional money in the estate to pay debts,” Rayndon said.

How to Avoid Burdening Your Family

One way to make sure debt doesn’t make a mess of your estate is to stay out of it. You can keep tabs on your debt by reviewing a free snapshot of your credit report on Credit.com, in addition to sticking to a budget that helps you live below your means. You may also want to consider getting life insurance (this explains how to know if you need it) and meeting with an estate planning attorney to make sure everything’s covered in the event of your death. If you’re worried about leaving behind debt after death, here’s more on how protect your loved ones.

Poor planning can leave your loved ones with some significant stress. For example, if you don’t have a will or designate beneficiaries for your assets, the law in your state of residence decides who gets what.

“If you don’t write a will, your state of residence will write one for you should you pass away,” said James M. Matthews, a certified financial planner and managing director of Blueprint, a financial planning firm in Charlotte, North Carolina. “Odds are the state laws and your wishes are different.”

It can also get expensive to have these matters determined by the courts, and administrative costs get paid before creditors and beneficiaries. If you’d like to provide for your loved ones after you die, you won’t want court costs and outstanding debts to eat away at your estate.

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Life After Death: How Do I Plan for My Pets?

If you want to make sure your pets are cared for after you die or are incapacitated, trusts can be very helpful. Here's how to use them.

Americans love their pets. In fact, about 65% of U.S. households – roughly 80 million total – have at least one pet. That’s according to the Insurance Information Institute, which also found that cats are slightly more popular than dogs.

For many of these households, pets are often seen as members of the family. And while we don’t have to think about sending our pets to college or listen to them complain (except maybe at mealtime or when they want to go outside), if you worry what will happen to your pets when you die or can no longer care for them, it’s best to address those possibilities in your estate plan.

One good way to plan for your pets is to create a revocable living trust and include provisions that allow your trustee to spend the money necessary to care for them. You can also make it clear to your family that your pets are important to you and that you want them with you as long as possible.

In addition, you can let your family members know that if you have to move into an assisted living facility or a nursing home, you would prefer to move to one that allows for pets or offers pet therapy at the very least. Again, a living trust can include very specific provisions regarding this. By the way, according to the National Center for Health Research, elderly individuals who cared for pets were better able to perform daily physical activities, which in turn allowed them to avoid having to move to an assisted living facility or a nursing home.

If you do not set up a living trust, you can make your wishes known to your family by writing them a letter of instruction. Although the letter will not be legally binding, it is still a good way to spell out all of your thoughts regarding what you want to happen to your pets. Reviewing all your wishes regarding your care, your pets care and your estate with your family members is wise.

Your estate plan can also help ensure that, when you die, your pets will be well cared for. For example, you can state in your will or in your revocable living trust document who you want to care for them after your death. It’s a good idea, however, to make sure that whomever you designate is willing to take on that responsibility.

Also, bear in mind that, although your pets may be like children to you, in the eyes of the law, they are property. Therefore you cannot leave them money or any other assets in order to help fund the cost of their care after your death. But, you can give money or property to the person you want to care for, which can be important because as you know, providing for a pet’s needs is not inexpensive. For many of you, leaving a sum of money in your will for that individual will suffice; if you do however, bear in mind that nothing will prevent him or her from using the money for some other purpose and/or from giving your pets away.

Is a Pet Trust Your Best Option?

An option that gives you more control over the care of your pets after your death is a pet trust. It allows you to dictate who will care for your pets (your Trustee) as well as how you want your pets to be cared for. For example, do want your cat to eat organic, grain-free cat food only? If so, you can state that in the trust document. Do you want your dog to be well-socialized and spend time at the local dog park? You can include that, too.

Not only does a pet trust allow you to maintain more control over the care of your pets than making a simple monetary gift to whomever you have chosen as their future caregiver, but it also lets you dictate what will happen to any extra money that may not be needed to care for a pet during its lifetime. (Want to learn more about finances after death? You can read this guide on 10 things you need to know.)

When you provide for your pets using your will or a trust, be sure to work with a qualified estate planning attorney. This is especially important when you are setting up a special kind of trust, like a pet trust.

Finally, one other option that may be available to you is to arrange for your pets to be cared for at an animal care facility in your area. For example, Texas A&M University runs the Stevenson Companion Animal Life-Care Center in College Station, Texas. You can search online for a similar facility in your area.

An animal care facility offers pet owners a safe home for the lifetime of their pet, but it often requires that an owner to pay a minimum donation per/pet. This kind of facility can be an excellent alternative if you don’t have any close friends or family members who are willing to care for your pets, or if you fear that caring for your pets could be a burden for your loved ones.

Melissa Donovan, JD, contributed to this article.

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4 Steps to Take Before You Buy Life Insurance

Here are four helpful tips for selecting the right life insurance policy.

Americans treat life insurance the same way they treat retirement. The vast majority know they’re not adequately prepared, yet don’t always take steps to change.

A 2015 study conducted by the nonprofit Life Happens and LIMRA (a life insurance market research firm) explains this phenomenon in vivid detail. The 2015 Life Insurance Barometer, which polled 2,032 adults, showed nearly one third of Americans believe they need more life insurance than they have. Further, 43% of Americans said they would feel the financial impact of losing their primary wage earner within six months of his or her death.

Astonishingly, 54% of those polled said it was unlikely they would buy more life insurance coverage within the next 12 months. The reason? According to LIMRA, many consumers tend to overestimate the price of life insurance, along with the difficulties of obtaining coverage.

“In addition to believing life insurance is too expensive, our research has shown that consumers are intimidated by the process of buying life insurance — 4 in 10 don’t know how much they need or what to buy,” said Todd A. Silverhart, corporate vice president and director of LIMRA Insurance Research. “Having a better understanding about the factors that influence pricing might help consumers feel more confident and encourage them to pursue getting coverage they believe they need.”

What You Can Do

Like anything else, the key to finding and obtaining the ideal life insurance policy (or policies) is educating yourself on the ins and outs of this coverage. Knowing how policies work and how much they cost is one of the first steps toward protecting your family in the event of your death.

If you’re one of the millions who know you don’t have enough life insurance coverage, here are some steps to take today:

1. Assess Your Risk and Be Specific

Bismarck, North Dakota, financial advisor Benjamin Brandt suggests taking a look at your lifestyle to see which risks you’re trying to hedge against. Do you have unfunded retirement needs? Young children? Mortgage debt? (You can see where your finances stand by viewing two of your free credit scores on Credit.com.)

“If your risks have a specific beginning and ending, consider term life insurance,” says Brandt. Because term life insurance offers coverage for a predetermined length of time, you can customize your policy so it covers a stretch of time when you need it the most. If you plan to retire in just 15 years, for example, you may be fine with a 15-year term life insurance policy that would replace your income if you died.

Whole life insurance provides lifelong life insurance coverage with cash value you can borrow against, but at a more significant cost. Before you buy any policy, you should make sure you understand the difference, how long your coverage will remain in place, and how each type of life insurance might work in your favor.

2. Determine How Much Income You Need to Replace

It’s tempting to try to use a simple formula to determine how much coverage you need. Although you might hear that four times your annual income is a good rule of thumb, this is not enough coverage for most people.

North Carolina financial advisor Peter Huminski of Thorium Wealth Management offers this trick to come up with a smarter amount.

“Multiply your annual income by seven to 10 years,” says Huminski. “The more debt you have or the more responsibilities you hope to cover (such as young children’s needs, for example), the more years you should use for this formula.”

If you earn $100,000 per year, for example, you could estimate you need $1 million in coverage as an absolute minimum.

3. Take a Close Look at Your Liabilities

“The number one reason that people give for purchasing life insurance is to provide income for their family in case of death of the primary income earner,” says financial advisor David G. Niggel of Key Wealth Partners in Lancaster, Pennsylvania.

However, many people fail to look beyond what they earn to what they actually owe.
For example, you might think you need $50,000 in life insurance coverage to replace your salary for the next 20 years — or a $1 million dollar policy. But if you have a $200,000 mortgage, $100,000 in student loan debt, and kids nearing college themselves, you need a whole lot more.

“In order to calculate a minimum amount, you will need to know your income, mortgage balances, debts (such as credit card, auto loans, student loans) and future college tuition expenses,” says Niggel. “This calculation will give you a good starting number that you can discuss with your financial advisor and make any adjustments necessary to fulfill your goals and family wishes.”

4. Shop Around

Just because your college buddy sells life insurance doesn’t mean he should be your first and only contact. Because of the many ways life insurance firms price their individual policies, you could pay considerably more if you don’t shop around.

“Consider working with an independent insurance professional or finding a quote engine online,” says Minnesota financial advisor Jamie Pomeroy. “They will help you look at dozens of different insurance companies and help you determine which company offers the least expensive quote with the highest rated company — and one that has a clear underwriting process.”

This simple act of shopping the life insurance market can potentially save you lots of money in lower premiums over the long haul, says Pomeroy. And due to the wonders of the internet, you can conduct plenty of price comparisons without even leaving your home.

Final Thoughts

Buying life insurance isn’t rocket science, but it does require some work. Not only do you need to analyze your family’s needs, you must compare policies and shop around for the best deal.

Also know that certain factors such as your health and your credit may affect your premiums — and even prevent you from buying coverage. Just like you can’t buy homeowner’s insurance once your house is already on fire, you may not get the life insurance policy you want if you’re chronically ill or have lifestyle factors that might lead to early death.

Either way, the only way to know where you stand is to figure out what you need, shop around and fill out a life insurance application once you’re ready. With good health and credit, you may qualify for an inexpensive life insurance policy that could help you sleep better at night.

The author has an insurance license and has relationships with multiple insurance companies. However, these relationships do not result in any preferential editorial treatment.

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7 Documents You Need to Fill Out Before You Die

Here's a list of all the important estate planning documents you'll want to compile.

Estate planning is the process of establishing a framework to manage your assets upon death, disability or incapacity. It involves creating documents that outline your wishes. While estate planning is not a pleasant task, it is critical that you implement it before you need it.

Here are seven critical documents necessary to cover the aspects of a well-devised estate plan.

1. Last Will & Testament

The fundamental purpose of a will is to outline who will receive your assets upon your death. Another important purpose of a will is to specify guardianship for your minor children. A guardian is one who takes legal responsibility for the care of your minor or incapacitated children after you are gone. It is important to understand that a will does not become effective until the date of death. So it does not provide any benefits during your lifetime. A will can be changed at any time (assuming you are not mentally incapacitated). It can be amended by using a codicil or revoked by writing a new will. A will can also create a trust upon your death (more on this below). If your estate is large enough (over $5.49 million in 2017), you may also need to incorporate federal estate tax planning into your documents.

2. Trust

A trust is a legal instrument that provides ongoing management for your assets. It can be inter vivos (also known as a Living Trust, which exists during your lifetime) or Testamentary (one that is created by your will upon your death). It is a good idea to leave assets in trust if the beneficiaries are minors, incapacitated, or if they are simply not fiscally responsible. The trust document names a trustee who has the responsibility of managing the assets in the trust and determines when and how much of the trust assets to distribute (subject to the terms you have written in the trust). You may want to name a trustee while your child is under a certain age, say 25 or 30. Then, once your child reaches that specific age, they can either act as their own trustee, or the trust can terminate and distribute all of the assets to your child outright.

3. Power of Attorney

A Power of Attorney allows you to empower someone else to act on your behalf for legal and financial decisions. It can be a Durable Power of Attorney, which becomes effective immediately, or a Springing Power of Attorney, which becomes effective upon a stipulated event, typically when you are disabled or mentally incompetent. It is critical that you completely trust the person to whom you provide this power, as he or she can legally act on your behalf.

4. Healthcare Power of Attorney

A Healthcare Power of Attorney (also known as a Medical Power of Attorney) gives a trusted individual the authority to make decisions about your medical treatment should you be unable to do so on your own. No financial authority is granted in this document, only medical power. So you could provide one person the Durable Power of Attorney and another person the Healthcare Power of Attorney if you desire.

5. Living Will

While the Healthcare Power of Attorney authorizes another to make medical decisions on your behalf, a Living Will (also known as a Directive to Physicians) sets out your predetermined wishes regarding end-of-life care should you become terminally ill or permanently unconscious. Essentially it takes the decision to withhold life out of the hands of your medical providers and the ones you love so that they are not burdened by it and so that you can be assured your wishes are respected.

6. HIPAA Release

One of the important provisions of the Health Insurance Portability and Accountability Act of 1996 (HIPAA) is the obligation that medical records be kept confidential. While this is definitely an important requirement, it can have severe unintended consequences. Without the legal authority to share medical records, your family may not be able to obtain important information regarding your medical condition and treatment if you were to become incapacitated. A HIPAA release allows your medical providers to share and discuss your medical situation with whomever you specify in the document.

7. Letter of Intent

A Letter of Intent is a simple, non-binding personal letter to the ones you love expressing your desires and special requests. It may include information regarding burial or cremation, or a specific bequest of collectibles or personal items. While it does not typically have legal authority, it can help to clear up confusion regarding your personal preferences.

Estate planning can be complex and the laws vary widely by state. This article is general in nature and is not meant to provide legal advice. I recommend that you engage the services of an estate planning attorney to discuss your wishes and prepare the appropriate documents.

[Editor’s Note: You can find more on estate planning here. There are also some tips to ensure your debt after death doesn’t harm your family here. Also, it’s a good idea to get your free annual credit reports every year so there are no surprise debts that need to be addressed. You can get a free credit report summary every 14 days on Credit.com.]

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What Your Family Needs to Know About Your IRA Distributions

ira-distribution-after-death

Things become complicated upon an IRA owner’s death. If the account holder dies before his required beginning date, or RBD, there is no required minimum due for that year. If, however, the participant dies after his RBD, the beneficiaries must take his final required minimum distribution (RMD) before December 31 of the year of death. If it is not taken, the 50% penalty applies.

After the year of death, the beneficiaries now are obligated to take their own RMDs annually. While the requirement for lifetime minimum distributions is commonly recognized, many people are unaware that RMDs continue after death. If the correct RMD is not taken, the same 50% penalty is assessed on the beneficiaries.

The rules for these required distributions are determined by two broad factors:

  1.  Whether the participant had reached his RBD before death
  2. The type of beneficiary: spouse, non-spouse, trust or estate

Roth IRAs do not require lifetime RMDs. However, upon the death of a Roth IRA owner, the beneficiaries are required to take RMDs or face the same stiff 50% penalty.

Death Before the Required Beginning Date

First, we will assume that RMDs have not yet started prior to the participant’s death (he died before reaching age 70½, leaving his wife as the beneficiary). In this scenario, the spouse would have three options:

  1. Treat the IRA as her own and follow the RMD rules for her own IRA
  2. Start distributions when the participant would have turned age 70½ using her current age each year to determine the correct life expectancy factor from Table I
  3. Take any amount each year, but take the entire balance December 31 of the fifth year following the spouse’s death (known as the five-year rule)

If the goal is to defer taxes as long as possible, the five-year rule is probably not ideal since the entire account will be liquidated and all taxes paid within five years, which may be significantly shorter than the life expectancy of the beneficiary. However, if no distributions are made in the year after death, this option becomes the default.

It is important to remember that RMDs are just that: required minimum distributions. Any of the affected parties can always take out more than the minimum required. So electing an option that provides for the lowest minimum distribution offers the best planning opportunities. It provides the absolute least that must be taken without penalty, without compromising the option to take more at any time.

A non-spouse has two options if RMDs have not yet started prior to the IRA owner’s death:

  1. Distribute the balance by using the Table I factor corresponding to the beneficiary’s age on December 31 in the year following the owner’s death. Each subsequent year, she would reduce the previous year’s factor by one (rather than using the factor for the new current age each year)
  2. Assets can be distributed using the five-year rule.

The only option available to trust or estate beneficiaries when RMDs have not yet commenced is the five-year rule. The estate is automatically the presumed beneficiary if there is no beneficiary listed. So, it is critical that the participant names both a beneficiary and a contingent beneficiary in order to preserve the tax deferral available using the life expectancy option above.

Death After the Required Beginning Date

If, however, the participant had already started RMDs prior to death, a separate set of rules apply. Again, the spouse enjoys the most flexibility. Her options include:

  1. Treat the IRA as her own (like the previous scenario)
  2. Distribute the balance over her life using her current age each year to determine the factor used in Table I
  3. Distribute the account based on participant’s age as of his birthday in the year of death (if he died prior to his birthday, add one year to his age) using Table I. Then each subsequent year, reduce the previous life expectancy factor by one.

While a spouse has several options to continue pre-death RMDs, a non-spouse is left with only one option. They must use the younger of:

  1. Their age at year end following the year of the owner’s death or
  2. The owner’s age at birthday in year of death

To calculate the RMD, divide the account balance by the life expectancy factor that corresponds to that age in Table I. Each subsequent year, reduce the previous life expectancy factor by one (as opposed to looking up the new current age each year).

If multiple beneficiaries are named, it is best to establish separate accounts for each beneficiary at death so that each can utilize their own life expectancy factor. A single beneficiary account will force all of the beneficiaries to use the oldest beneficiary’s age to determine RMDs for all of them. This will force higher RMDs than necessary for the younger beneficiaries, which will accelerate taxation.

A trust or estate beneficiary has the same single option as a non-spouse, with one modification. Since a trust is not a natural person with a life expectancy, it cannot use the beneficiary’s age but is forced to use the participant’s age as of his birthday in the year of death to find the corresponding Table 1 life expectancy factor. Some Trusts can be drafted to include a “look-through provision” that names a qualified individual beneficiary or beneficiaries that qualify as individuals. However, if the estate is named, or no beneficiary is named at all, this rule applies.

In my many years as a Certified Financial Planner practitioner, I have come across situations where individuals were provided inaccurate advice from bankers, stockbrokers and even financial planners. IRA distribution planning is very complex. It requires a high level of expertise in order to make the best decisions that minimize taxes and penalties and provide the most flexibility for the individuals affected. Since the general information provided in this article is not intended to be nor should it be treated as tax, legal, investment, accounting, or other professional advice, I highly recommend that you consult with a Certified Public Accountant and a Certified Financial Planner professional before making any of these critical financial decisions.

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