Estate PlanninG

Things to Consider Before You Retire

After many years of hard work, it's finally time to retire and focus on your next phase of life. But before you begin this next chapter, you need to make sure that you have fully thought through this exciting change.

This blog post will help guide you through some of the most important things to consider.

Things to Consider When Beginning Your Retirement

With this new chapter comes certain estate planning issues that you need to consider.

Do you have an existing estate plan?

A properly executed and legally binding estate plan is a great first step toward ensuring that you and your loved ones are cared for. However, estate planning is more than just a one-and-done event. You must review your plan every year or so, especially after major life events such as the beginning of your retirement. When considering your existing plan, ask yourself the following key questions:

  • Do you still own the same property or have the same account balances as when your plan was first created? What will the balances be like at your death? You likely put money into investment or retirement accounts during your working years to prepare for this next chapter. While you may have a lot today, you need to know that this value may decrease once you start withdrawing from those accounts.

  • Does your plan assume that your children or other young beneficiaries are still minors? A birth usually prompts parents to have an estate plan created. However, once it has been drafted, many parents continue their lives without giving much thought to their estate plan. If it has been some time since your estate plan was created, your then-minor children are likely now adults or approaching adulthood. Your focus may no longer be on choosing the proper guardians but on ensuring that your adult children's needs are adequately addressed in your documents.

  • Does your plan rely on proceeds from an employer-provided life insurance policy? As part of an employment package, many employers offer life insurance. However, this policy may no longer exist once you are no longer working. If you were relying on these proceeds to provide for your loved ones at death, you'll need to explore other options.

  • Do you want to change how much your beneficiaries inherit and how they receive their inheritance? Now that some time has passed, are the amounts and ways the money and property are being given still appropriate or possible? For example, imagine your will or trust provided that $300,000 be held in a trust for your only child's benefit and then distributed to them when they turned thirty-five. Is it likely that you will have less than $300,000 at your death, and what wishes will have to be sacrificed as a result? Also, if your child is now thirty-five or older, any money and property would be given to them automatically based on the provisions in your documents. Are you still okay with that? Now that your child is older and you better understand their needs and abilities, you may want to consider changing how they receive the money and property. They may require more than you had originally planned, or perhaps they are successful enough that they would be fine without an inheritance from you.

Do you have an incomplete estate plan?

Do not procrastinate any longer. The only way to truly protect yourself and your loved ones is to have an intentional and legally enforceable estate plan. To begin thinking about your estate plan, you need to evaluate your new lifestyle and answer questions such as the following:

  • What accounts and property do you own? To make sure that we craft a comprehensive plan, we all need to be on the same page about what you own and the value of your money and property. From there, we can help you determine what will happen to this money and property if you cannot care for yourself and at your death.

  • What are the current needs of your loved ones? Based on your unique situation, you should determine the needs of your loved ones and whether you can support their needs during your lifetime (if necessary) and at your death.

  • Can you accomplish your goals with what you have? Working with an experienced professional, you can consider the answers to the first two questions and determine how likely you will be able to carry out all of your wishes. Together, we can examine all options and develop the best possible solution for you and your loved ones.

We're excited to help you celebrate this new chapter in your life. Part of this celebration should include a visit with your financial and estate planning team to ensure the celebration can continue for many years. Please get in touch with us if you are interested in discussing your existing estate plan or creating your first one. Call Santaella Legal Group, serving all of California, at (925) 831-4840, or reach out to us here.

Keep Reading: