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Retirement and estate planning

On Behalf of | Sep 7, 2021 | Blog, Estate Planning |

Some California residents write a will, stick it in a drawer and forget about it, but the truth is that estate planning is a process. Whenever you have a major life event, it’s a good time to revisit your estate plan. The birth of a child, marriage or divorce will all require changes to an estate plan. Retirement is another major life event when you should re-evaluate your estate plan.

Reviewing your plan

The first thing to do is review your estate plan. A will is the foundational document of the estate planning process. However, a will is not always authoritative. For example, beneficiary designations on insurance policies and 401(k)s will supersede whatever appears in a will.

That’s why it’s important to revisit these designations and ensure that they’re up to date. Sometimes, people forget to remove an ex-spouse as a beneficiary. They may inadvertently cut their current spouse and children out of a significant part of their estate because they didn’t check their beneficiaries.

A lifestyle change

In retirement, people’s lives change significantly. They may be more concerned with maintaining what they have and avoiding additional taxes. Making changes to an estate plan can assist people in doing this.

Using instruments like trusts can be one way of protecting assets for yourself and your beneficiaries. Some trusts make it easier for your survivors to access funds after your death. They may also be able to help your family avoid some estate taxes. Roth IRA conversions may also help you avoid some taxes.

Estate planning may be affected by changes to the law at the state and federal levels of government. Any estate plan needs to evolve so that it still works as intended. You’ll want to regularly review your estate plan to make sure it will still meet your meets regardless of changes in the law or your family.