Keys to Preserving Wealth Through Multiple Generations
Many different people are interested in protecting their legacy as well as passing on as much wealth as possible to future generations. According to research, however, many high net worth families have lost their fortunes by the second or the third generation. Up to 70% of a wealthy family’s fortune is typically gone by the third generation and nearly 90% of it is gone by the fourth. This is why it is extremely important to consider preserving wealth through multiple generations with the help of the right estate planning strategies.
Although many high net worth families are taking conservative positions this year, it is important to consider setting up tools that will help individuals let trust and other strategies last as long as possible. Some of the tools that are typically used in this situation include multiple kinds of trusts, a family limited partnership, and an intra-family loan.
The urgency of wills and trusts cannot be overstated for a high net worth family, where it becomes imperative to calculate how much money will be passed on to future generations. Trusts provide a great deal more flexibility and control over your intentions for passing on assets and can also help to shield you from some of the public nature of a will.
Trusts offer more ability for you to outline how a beneficiary will receive the assets. This is ideal for your concerns about a spendthrift child or a beneficiary may need some time and planning to adjust to his or her new assets. Establishing that the trust kicks in at a particular age can encourage children to finish their educational goals as well.
Advanced planning is important for everyone, but especially for high net worth individuals who hope to pass on the wealth and the family legacy for generations to come. Having a relationship with the right Massachusetts estate planning lawyer is important.
Plenty of celebrity deaths have raised important considerations about the estate planning process. At the time that he unexpectedly passed away, Alan Thicke appeared to have a fairly comprehensive estate plan in place.
He generated a trust in 1998 for the benefit of his family and executed a prenuptial agreement in 2004, when he married his wife, Tanya in 2005. The trustees of the Thicke Living Trust, his sons Brennan and Robin came forward recently, seeking direction from the court regarding Tanya’s impact. The petition argues that Tanya requested a larger portion of the estate that was allocated to her under the trust terms and denied the validity of any prenuptial agreement.
She also suggested that she may be entitled to Marvin rights, which are typically brought up to protect an unmarried partner in palimony cases. The term Marvin rights is taken from the case involving the late actor Lee Marvin. Marvin v. Marvin. 18 Cal.3d 660 (1976). Her argument is that she sacrificed her own career to support Alan Thicke and has now been severely prejudiced in her career potential as a result.
Even though California is a “community property” state, the critical point of interest here has to do with the intersection of two different legal documents; the trust and the prenuptial agreement. The prenuptial agreement determines what of the property in the estate is considered community and this is the property that Tanya would maintain ownership rights over.
This highlights the complexity of the estate planning process and how failing to plan or not considering all the different legal documents you have previously created may intersect with your estate plan can lead to problems.
Even if you’re not a celebrity, it’s important to have the right estate planning lawyer in Massachusetts help you articulate your goals.
Link to Marvin case:
Planning ahead for retirement is something you’ve probably been doing for a long time. However, many people are plodding along with their retirement plans without realizing that some mistakes could be costing them and their children in a big way.
Here are the ten biggest mistakes you might be making with your retirement plan that could force your children to have to step in and take care of you:
- No clear investment plan, or a plan that’s based on a “buy and hope” strategy
- Too much of your own company or employer’s stock
- Aiming for an “average” amount in your accounts
- Still paying the bills for an adult child’s regular needs or lifestyle
- No established plan for your healthcare expenses in retirement
- Excessive debt and no plans to pay it down
- No spending plan for your current expenses or your future budget
- You’re taking too much out of your retirement plan early
- Your only retirement plan is a dedication to continue working to fund your needs
- No plan or insurance in place to deal with long-term care needs
As you can see from this list, most mistakes have to do with not having a contingency plan. Just one long-term care event or accident could leave you unable to work and also coping with costly medical expenses. For someone who planned to be working and very healthy throughout all their retirement, this plan exposes you to a lot of risks if even just one accident occurs. Developing a disability or cognitive problem could present even more serious issues.
Along with comprehensive retirement planning, it’s important to think about your legacy and your estate plan. Consulting with an experienced Massachusetts estate planning lawyer is critical.
Looking ahead to retirement can help you figure out whether you have saved enough to support your lifestyle and how you intend to pass on some of your assets to others.
The typical worker in the United States retires at age 63, but a growing portion of this population is waiting to retire until later in order to enhance their savings. It turns out that there is not perfect retirement age, but you may be able to identify the various milestones linked to traditional retirement in the United States that can help you figure out what might be most appropriate for you.
You might decide to delay tapping into Social Security benefits since you can increase the amount you receive by going this route. If you delay taking Social Security beyond your full retirement age, your benefits go up. For example, full retirement age is 66 and you If you opt in at age:
- 66, you’ll receive 100% of your monthly benefits
- 67, you’ll get 108% of your monthly benefits
- 70, you’ll receive 132% of your monthly benefits
Social Security Chart: https://www.ssa.gov/planners/retire/1943-delay.html
Some of the most important milestone ages nearing retirement include:
Age 59 ½ is the first time you are eligible to take penalty free withdrawals from your IRA or 401(k).
Age 62 is when you can start claiming social security.
Age 65 is when you initially become eligible for Medicare.
Age 66 is the full retirement age for those individuals born between 1943 and 1954.
Age 67 is your social security full retirement age, if you were born in 1960 or later.
Age 70 is when you stop accruing delayed retirement credits for waiting to enroll in social security.
Age 70 1/2 is when it is necessary to start taking required minimum distributions or RMDs from your traditional 401(k) or IRA.
There are some additional questions that you can ask yourself to help to determine whether or not it is time for you to retire. These include;
- How is your health in general?
- Are you still working and how is your job?
- How do you plan to fill your dates?
Consulting with an experienced estate planning attorney in Massachusetts is another step that is necessary to take as you get closure to the retirement process.
The answer to when is the appropriate age to retire is not easy for anyone to answer, but one of the most important things to consider as you evaluate this question is how you intend to spend your days. This will have a significant impact on how much money you will need and can help you target an age most appropriate for you.
As you attempt to figure out an ideal retirement age, think about how you’ll be spending your days not working. Will you be keeping busy at home? Or will you grow frustrated and restless without entertainment and travel? If you are concerned that you will not be able to fill your days successfully, you may wish to wait a couple of extra years to save enough money to sustain that lifestyle. If you are the type of person who finds themselves bored easily, you may even wish to postpone your retirement age even if you already have a substantial nest egg.
Too many retirees fall victim to depression, so working longer helps to serve as a social outlet and gives you additional motivation to wake up every single morning. It might make sense to delay your retirement age even if you don’t necessarily need the money.
This can give you additional assets to include in your estate plan and leave behind a greater legacy for your loved ones. If you intend to leave behind retirement assets that you do not expect to leave to your family members, it is an ideal situation to discuss with an experienced estate planning lawyer as soon as possible.
Unfortunately, far too many people believe that estate planning begins and ends with a simple will but this can be a catastrophic mistake as wills are exposed to potential mistakes as well.
This is particularly true if you attempt to engage in estate planning process on your own without consulting directly with an attorney. What follows are four key steps to consider for your estate plan:
- Learn the local laws as well as the real estate and probate rules in your individual state. If you own property in multiple states it is even more important to have an experienced attorney representing you and helping you put together your estate plan.
- Never put a piece of property into a child’s name while you’re still alive without consulting with an attorney about the right strategy to do this. If the child eventually goes bankrupt, creditors may be eligible to seize the house.
- Be careful of transferring bank accounts to children in order to avoid estate and probate taxes. With individuals living longer, this could leave will writers destitute in their retirement years.
- Ensure that your beneficiary information is always updated and your wills are updated on a regular basis by scheduling consultation with an attorney every single year to discuss whether or not your estate plans are still meeting your individual needs.
Following these four steps could help to minimize the chances of disputes and potential problems later in life.
When it comes to approaching your estate planning, having a lawyer you can count on is critical. Knowing that you have someone who can help you as your needs change over the course of your life. A Massachusetts estate planning lawyer may be very helpful for your planning process.
It seems like a simple fix to find a document online and use it for distributing your estate in the future, but this could be a big mistake if the form is not correct. Unfortunately, in many such cases, no one realizes the mistakes until it’s too late.
Many people who approach the estate planning process want to get through what they need to do as quickly as possible. However, this can be a mistake if you choose to go the DIY route. Having an estate plan that is specific to your needs and appropriately prepared can make a big difference between having your assets tied up in a costly and frustrating probate proceeding and passing things on in a smart manner.
Online self-help companies have surfaced to provide estate planning to the crowd who is looking for a quick fix, however, these fill-in-the-blank documents often do not suit the individual needs of the person completing them and may not even be legally valid depending on your state’s laws.
Legal language is frequently omitted in these fill-in-the-blank forms, for example, in the event that a revocable online trust form doesn’t specify the language about where your assets would go if one of you beneficiaries passes away before you, this could generate confusion in the future. Special consideration for these plans requires that you schedule a meeting with a Massachusetts estate planning lawyer who can help you determine the most appropriate avenue for your individual strategies.
A recent study conducted by Scottrade identified that the vast majority of people who are investing do not act on their own for retirement planning and while some of them are satisfied that the advice they receive, many investors are also confused, cynical or even overwhelmed.
The majority of U.S. investors have made the decision to partner directly with an advisor for retirement planning. Approximately two-thirds of people in the United States are working directly with a financial professional to help them with the retirement planning process and nearly half of them are extremely satisfied with the way their financial advisor has managed their retirement assets.
Nearly half of investors in the United States, in particular GenXers and Millennials, are overwhelmed with the investment choices available and have trouble finding the right advisor.
The challenges associated with retirement planning mean that far too many people choose not to take any action. There are clear parallels between retirement planning and the lack of estate planning, since many people find the process confusing or overwhelming without the help of an outside professional.
It is just as important to identify an experienced professional to help you navigate the estate planning process as it is to find someone to assist you with your retirement. Your estate planning attorney can make recommendations about your individual situation and help you navigate this complex process to determine a plan that works for your individual needs.
Baby boomers are one of the biggest sections of society considering the estate planning and retirement planning process. According to a new study published by Bankers Life Center for a Secure Retirement, baby boomers have a lack of trust in institutions that has led to a permanent financial problem for many of them.
Ten years after the financial crisis started in 2007, only 2% of baby boomers with median incomes felt that the economy had completely recovered. This has required many boomers to adjust their retirement expectations. Although the middle-income boomers who participated in the study still indicated that they plan to retire, the crisis has forced them to reconsider their expectations for what their retirement will actually look like.
One important consideration in this is adjusting your estate planning documents and considering long term care insurance to help with any additional health costs that may emerge suddenly after an accident or diagnosis. The assets you may have set aside for your loved ones may need to evaluated carefully if you need help with nursing home care, for example. How your retirement assets affect your ability to qualify for Medicaid is another crucial conversation you will want to have with your estate planning attorney.
The latest report conducted in the study indicated that up to 84% of boomers in the median income range took a minimum of one step to adjust their spending behavior after the recent financial crisis. To learn more about the estate planning process and how it can work hand in hand with retirement planning, consult an experienced estate planning lawyer today.
Your aging loved ones may require advanced care as they face greater physical issues, but as family members, you should also be aware of potential mental indicators that your loved one is struggling. This may be in the form of symptoms of depression, anxiety, or isolation. No matter how these signs prevent, they can have a serious impact on your loved one’s ability to live independently. Existing mental concerns can also amplify physical conditions.
Anxiety in older adults is more common than you might think. While anxiety that makes it difficult for an elderly individual to get through the day is not a typical part of aging, up to 14% of older adults already meet the criteria for an anxiety disorder. According to research published in the International Journal of Geriatric Psychiatry, nearly 30% of older individuals currently receiving care from a provider will have anxiety symptoms outside of a disorder that make day-to-day life difficult.
The most common anxiety disorders affecting the elderly include social phobia, panic disorder, generalized anxiety disorder, and PTSD. If you begin noticing that your loved one is withdrawn or not engaging in activities he or she previously enjoyed, it may be time to sit down and discuss anxiety-specific care.
If you are an adult helping an elderly loved one cope with physical or mental concerns tied to aging, you may also benefit from setting up a meeting with an experienced estate planning attorney. Talk to a lawyer now about the tools and strategies that can help you plan ahead with a loved one.