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People who have worked hard most of their lives typically look forward to retirement. While people planning for retirement may focus on how they will occupy their free time, there are other things they should consider as well. For example, it is a good idea for people who are about to retire to examine their estate plan, or if they do not have one, to get a plan in place. If you are about to end your work life, it is smart to meet with a trusted estate planning lawyer to discuss what adjustments you may need.
Passing on your Assets
As people plan to retire, if they have not already, they should consider how they want their property to be distributed after they pass away. For example, they should have a Will; without one, most of their property will be subject to court supervision and will pass onto their heirs in accordance with New York’s intestacy laws, which may not align with their wishes. They should also review documentation for any retirement or pension plans they have in order to ensure that the beneficiary designation is up to date. People often designate beneficiaries when they first begin a job and then forget about them until they retire. In many cases, the people named as beneficiaries may have passed away or are no longer in the person’s life, and the beneficiary designation will need to be updated to accurately reflect their current desires.
Reducing Tax Obligations for Heirs
It is not uncommon for people to preserve as much of their property for their children as possible. While retired people cannot grow their estate through work income, they can take measures to reduce the tax obligations their heirs will face once they pass away. For example, they may consider placing some or all of their property in a Living Trust. Like Wills, Trusts are estate planning assets that can be used to pass property to beneficiaries, but they differ from Wills in many ways. For example, once a person places property in a Trust, they no longer (directly) own it, whereas with a Will, a person owns an asset until their death. Trusts allow heirs to avoid many of the fees and expenses they would have to pay if property had to pass through probate. Additionally, Grantors (the person setting up and transferring property into a Trust)can often use and control property in a Living Trust for the duration of their lives.
Retired people may also want to consider converting assets in traditional retirement plans into Roth IRAs, as doing so has many benefits. First, they are not subject to required minimum distributions which means that they can keep growing throughout a person’s life. Also, the parties that inherit Roth IRAs will have to take required minimum distributions but they will not have to pay taxes on the distributions as long as the account had been opened for a minimum of 5 years.
Meet with an Experienced Corning Estate Planning Attorney
Estate planning can benefit people throughout their lives, but it is especially useful for those nearing retirement. If you are preparing for retirement and want to review or modify your estate plan, it is in your best interest to meet with an experienced Corning estate planning attorney.
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