“The secret of getting ahead is getting started.” Mark Twain
Throughout one’s working life, it’s not always about saving judiciously and investing wisely. Such efforts can fail to pay off without that all-important first step in creating an estate plan: Without an estate planning strategy, it is a sure way to undermine even the most modest of retirement goals.
A recent study in Investment News indicates that Millennials are, indeed, looking for “regular guidance from an advisor.” Furthermore, they value a “‘personal trainer” path, whereby their financial adviser helps “keep them on track with their goals.”
‘Boomer’s’ still have time to plan for the future.
According to an AARP post, the 21-million Boomers born in the early 1960’s, turned 50 in December 2014 ( ‘Boomers’ were born somewhere between 1946 to 1964). Moreover, one of the big retirement mistakes for Baby Boomers, in general, is not having such a plan
Chalk it up to short-sightedness, procrastination or being in denial, but thinking about ‘death’ is not on the Boomer’s radar, as noted in a USA Today article. Unfortunately, this age group may forever remain in the dark about the need for an estate plan, a strategy that can avoid a slew of tax consequences for heirs. What’s more, and after the right financial and legal consultation, a boomer may see the viability of creating, say, a living trust.
’If you are looking at Baby Boomers, they are looking at what their cash flow will be in retirement,” says Carol Kroch, managing director, wealth and philanthropic planning at Wilmington Trust in Wilmington, Del. “Can they do the things they want to do? Can they retire? Can they keep the house? They are not focused on death’.” USA Today
Tax problems for heirs?
For sure, boomers may not be given that ‘second chance’ in life that was given to Mark Twain. He read about his ‘death’ in a newspaper while traveling abroad, and his famous quote about the reports of his death as being “greatly exaggerated” can serve as a playful reminder boomers and all investors alike: They still have time to not only amp up their retirement contributions but also develop that estate plan to ensure a smooth hand-off of assets to heirs.
Looking to the future….
Often, the main focus of the estate plan will include the following:
- Property and financial assets
- Children and medical decision
When it comes to medical considerations, a long-term care insurance policy can help protect assets from depletion when faced with nursing home care, or extended care in the home.
Also, another critical component to the estate plan is the medical power of attorney; this, to make sure health-related decisions are made according to wishes that are spelled out in the document.
When a ‘second marriage’ is in the picture…
An estate plan can also be written to protect assets should a second marriage not work out. These scenarios often use a “firewall” consisting of prenuptial, or postnuptial agreements.
Having that ‘family conversation.’
If you are a business owner, make certain your offspring, for example, want to take on the family business. Indeed, is it something they truly want to do.
Such talks should be open-ended and clearly stated as to who will be getting dad’s tools, the vacation home, family boat and the like.
Whether you’re a late starter in investing for your retirement or looking for guidance to make sure you’ll not outlive your investments, call to schedule a chat. We can help you set aside funds for a child’s college years; our products are also designed to help protect your assets now and throughout your retirement years.