Contrary to popular belief, a detailed estate plan is not about huge taxes and massive trust funds; many are as simple as a couple sheets of paper.
aking steps to plan for the future of your estate can be one of the most important things you do. In fact, dividing and bequeathing your property is the very last official action you make. To ensure that loved ones can make the most of what you are able to leave them, it is important that you learn the different parts of estate planning and consider how they might affect you.
Probably the most obvious form of wealth transfer, direct gifts are just what their name implies—monetary gifts given directly to your descendants. However, even with a straightforward transfer, there are rules and strategies to consider. Familiarize yourself with the taxes imposed on these gifts and discover the ways to best maximize your wealth transfer through direct gifting.
If you get an inheritance from your spouse, parents, or other generous benefactor, chances are that some, or even all, of that inheritance will be in the form of an IRA. Many people are opting for IRAs, especially retirees who often roll over their 401(k) upon retiring. The rules for accepting an inherited IRA are different than for inherited cash. Your options depend on what type of IRA (Roth or Traditional), who’s giving it to you (spouse or non-spouse), and how old the benefactor was. It’s easy for a simple misstep to lead to a large tax bill, so tread carefully when inheriting an IRA.
It’s never too late to start saving or to adjust your savings strategy—the important thing is that you recognize how important retirement savings are, and make the choice to save for the lifestyle you want. To ensure that you save enough today to live comfortably tomorrow, consider the following:
According to the Investment Company Institute, it is estimated that there are over $20 trillion in retirement accounts as of December 30, 2013. Retirement accounts make up the majority of many people’s assets, and unfortunately, many owners of IRAs and their financial advisors are not fully aware of the complicated tax laws regarding distributions of these retirement accounts.
Retirement accounts are different than other investment accounts!