Social Security benefits represent an important, but often overlooked, component of retirement income planning. As a source of guaranteed income that cannot be liquidated, it is not often thought of as an asset. In fact, it is the single largest financial asset for many retirees, providing benefits for approximately nine in ten individuals age sixty-five and older and covering ninety-six percent of working-age adults.
A thoughtful retirement income plan involves varying degrees of monitoring and oversight to ensure continued success. While this may be readily apparent at the onset of planning, many otherwise well-constructed plans fail to consider what happens if active participation is no longer possible. Planning for mental incompetency is an often overlooked component of planning that can have devastating emotional and financial consequences. Thankfully, it can be proactively addressed through proper planning.
3 Reasons Why You Need to Have a Will
This week is National Estate Planning Awareness Week, which begs the question: why do I need a will?
In fact, more than 50% of Americans do not have a will, according to a 2012 Rocket Law survey, putting their families, assets, and legacies at risk.
Here are 3 reasons to be prepared:
1. Protect your assets. When someone dies without a will, they die intestate. If you die intestate, your estate is sent through probate court and determined by your state’s succession laws.
State imposed rules do not fulfill the wishes of the deceased. They are inflexible, impractical, and never include provisions for anyone not related to you. So, if you want to hand down your grandmother’s china to your stepdaughter, to have your best friend look after your dog, or to leave any of your estate to someone outside your immediate family, it is imperative to have a legal will in place.
Most people spend their entire lives working to create their assets; having a will in place ensures that your possessions and other assets end up in the hands of the people you care about.
2. Protect your children. One of the most important ways to provide for your children in the event that you are no longer around to do so is to designate a guardian and make a contingency plan that includes the logistics and financial aspects of caring for them. Writing a will allows you to designate the person that you want to care for your children. In the event of the death of both parents without a legal will, the state steps in and appoints the guardian of its choice for your children; there is no guarantee the state-appointed guardian will share your morals or values.
This is especially important for parents of special needs children. Parents with children who have special needs should create a supplemental needs trust, a special type of trust which ensures that the children do not lose access to needs-based government benefits due to inheritance of assets.
3. Protect your legacy. Adding the stress of fighting with lawyers (and possibly family disputes) is the last thing anyone wants while grieving for a loved one. Writing a will allows you to choose fiduciaries, the person/people/institutions responsible for the administrative work after your death. Appointing someone to manage your money, file paperwork such as tax returns, and protect your property ensures that your legacy is administered as you intended and protects your loved ones from unnecessary bureaucracy and stress.
Estate Tax & Transfer Analysis • Tax Reduction Strategies • Gifting Strategies • Charitable Giving • Planning For Children with Special Needs • Survivor Planning & Services