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Tough Questions Prompt More Thorough Estate Planning: Protecting Our Family.

July 19, 2019/in Asset Preservation, Estate Planning/by KT Williams

When thinking about assets and their estate plan, most people focus on who they want to receive the assets at death. And that is an important question to consider. Everyone should know who they want to receive their assets, and everyone should take steps to make sure the assets will reach them. But if we stop there, some unexpected and unfortunate outcomes may occur. Instead, we should consider some tough questions that may prompt more thorough planning.

What If Your Surviving Spouse Remarries or Finds a “Friend”: Will Your Assets and Family Be Protected?

It’s common for married couples, especially those couples who have enjoyed a long marriage, to say they want their spouse to receive all of their assets. Often, the beneficiary designations on retirement accounts and life insurance policies mirror this idea. One spouse is named as the beneficiary for the other. The end result will be that the surviving spouse owns and controls all of the property the couple accumulated.

The surviving spouse as the sole beneficiary may work out well. They may be a thoughtful, caring steward of the property. And perhaps the surviving spouse will only use the property for their needs and the needs of the couple’s children and grandchildren. But what if, unsuspectingly, the surviving spouse meets someone, and a relationship grows. This relationship could blossom into marriage or a deep “friendship.” How does the new relationship affect our estate planning perspective? Usually, it makes a big difference.

Because of the enormous impact a marriage or deep friendship could have on a surviving spouse’s perspective and use of the property, most people want their estate plan to protect what they leave behind. The protections will not deprive the surviving spouse of anything. The surviving spouse will benefit from the assets and have access to the assets for their needs. But the protections will limit the ability of the new spouse or “friend” to take the property for themselves. The end result is that the assets won’t be lost to this new spouse or friend, and the surviving spouse will benefit from the assets as intended.

What If Your Children Get Divorced or Die Much Younger Than You Expect: Do You Want Their Inheritance To Stay In The Family?

When considering where their assets should go upon the death of the surviving spouse, most people with children want the assets to go to them. That makes sense. We want our children to benefit from our efforts. But what if your child gets divorced: will the inheritance be at risk in the divorce? Or what if your child dies much younger than you expect: will the inheritance you left to your child benefit your grandchildren or will it, instead, go to your child’s surviving spouse.

The law tries to protect an inheritance in the event of divorce. Rather than being treated as marital property to be split, an inheritance should be treated as non-marital property of the person who inherited it. But does it always work that way? No. That’s why it is wise to protect the inheritance from the risk of a child’s divorce. You can plan your estate so that your child benefits without losing the inheritance if the child divorces.

Even if the child doesn’t divorce, the inheritance could still end up in the hands of their surviving spouse. This happens when the child dies younger than we expect, and their own estate plan directed all of their assets to their surviving spouse. As we mentioned above, a surviving spouse may find a new spouse or “friend” whose intentions are not pure and who may want to get a piece of the inheritance. To avoid this risk, you can add protections into your estate plan so that your property stays in the family and benefits those in the family who you want to benefit: your surviving spouse, children, and grandchildren.

How Do You Protect Your Assets For Those You Love?

There are estate-planning tools that we can use to protect your assets from the risks mentioned. The most simple and effective one is a trust. Although some people may think of a trust as a one-size-fits-all concept, it is not. A trust is infinitely flexible. We can tailor it to meet your own unique needs and concerns. And through the trust, we can protect your assets for your surviving spouse so that benefits flow to them without losing all the assets to a new spouse or “friend.” And we can use a trust to protect the assets from a child’s potential divorce or their untimely death. That way, the assets stay in the family and benefit your children and grandchildren the way you want. Contact me to explore this and other ways to make sure your property will pass to those you want. We don’t want to see your property lost to others who may not care for your family the way you do.

https://ktwilliamslaw.com/wp-content/uploads/2019/07/Protecting-Family-Photo.jpg 558 800 KT Williams https://ktwilliamslaw.com/wp-content/uploads/2015/12/williams-law-logo-rgb-640px.png KT Williams2019-07-19 14:10:462019-07-19 14:11:37Tough Questions Prompt More Thorough Estate Planning: Protecting Our Family.

Social Security Retirement Benefits: Should We Take Them Early or Wait?

July 5, 2019/in Retirement/by KT Williams

Many of us look forward to the day we can start receiving our social security retirement benefits. And most of us may have assumed we would take them at age 65 or whatever our full retirement age happens to be. But as we edge closer to age 62, we may be asked if we plan to begin our benefits when we reach age 62. At this point, we may consider taking the benefits earlier than we originally planned. So let’s look into the question: when should we begin drawing our social security retirement benefits?

When Can We Begin Taking Social Security Retirement Benefits?

First, we should know when we can take our benefits. Although the rules about taking social security retirement benefits are long and complex, the rules that apply to most of us are the same. So we’re going to focus our attention on those.

We can begin taking benefits at age 62. We can wait until age 70. Or we can take our benefits at our full retirement age which ranges from age 65 to 67, depending on what year we were born. If we begin our benefits at age 62, our monthly payments could be as much as 30% less than the payment we would receive if we waited to take them at full retirement age. But we can receive more than the full retirement age payment if we wait until age 70. For each year beyond our full retirement age that we wait, our benefit increases by 8%. So, waiting until age 70 could result in a 24% increase in benefits compared to taking them at full retirement age. But the more staggering difference shows up when we compare taking our benefits at age 62 and age 70. The difference in monthly payments if we take them at age 62 compared to age 70 could be as much as 77%.

What Factors Should We Consider?

As you can see, the age we choose to begin taking our benefits can have a huge impact on our monthly payment. But the impact on our monthly payment is only one factor we should consider. There are many factors, and they will vary from person to person. We are better off evaluating these important factors with our financial advisor, CPA, and estate planning/elder law attorney if we want to be confident that we’ve made the best choice.

Some factors we should consider are financial. For instance, how much income we receive from other sources, how much we intend to take from the balance of other assets and retirement accounts, and how much is needed to keep our retirement standard of living are all important factors.

Nonfinancial factors should be considered, too. For example, we may want to travel or to do certain other things that our health could prevent if we wait. Taking benefits early and retiring may allow us to make those memories and enjoy those experiences while we’re still able. We should be realistic about this though. If we’re married, we need to consider our spouse and be honest about how much time our spouse can truly stand to be around us. It might be less than we think. And, if that’s the case, we might need to consider an alternative to early retirement.

How long we expect to live is another important factor. Although we don’t have a crystal ball and we can’t predict how long we will live, most of us have an opinion based on our own health or family history. (An unhappy spouse may affect our lifespan too. Consider the wisdom in the earlier paragraph about considering our spouse when we think about early retirement.) Calculations show that someone who dies before their late 70s and begins taking benefits at age 62 can expect to receive more lifetime benefits than if they waited to take benefits. However, these calculations also show that those who live beyond their late 70s receive more lifetime benefits by waiting to take benefits.

When Should We Begin Taking Social Security Retirement Benefits?

Deciding when we should take our social security retirement benefits is a very personal decision. Our finances are simply one factor among many that influence the decision. For some of us, taking our benefits at age 62 is clearly the best option. For some of us, waiting until full retirement age might make the most sense. And for others of us, waiting to age 70 may be a no-brainer. Regardless, we can be more confident about our decision if we take the time to consider it with our professional advisors, such as our financial advisor, CPA, and estate planning/elder law attorney. We are happy to work with you and your other advisors as you consider this important question. Contact us for more information.

https://ktwilliamslaw.com/wp-content/uploads/2019/07/social-security-image.jpg 448 700 KT Williams https://ktwilliamslaw.com/wp-content/uploads/2015/12/williams-law-logo-rgb-640px.png KT Williams2019-07-05 15:03:052019-07-05 15:05:40Social Security Retirement Benefits: Should We Take Them Early or Wait?

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