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Estate Planning Recommendations to Keep Your Plan Current

Studies have found that over 64% of Americans don’t have an estate plan. Many Americans over the age of 65 believe they lack the knowledge necessary to adequately plan for retirement and are not knowledgeable about basic retirement tools, like 401ks. If you don’t have a proper plan in place, or if your plan is decades old, don’t hesitate to contact a local estate planning attorney to start the process of protecting your loved ones’ futures. Here are a few quick estate planning tips that will help you learn more about this important area of law.

It is not only for the rich and famous.

Many Americans equate estate planning with large complicated assets and estate tax loopholes. This could not be further from reality. And while it’s true that the estate tax won’t impact the vast majority of us, you still need a comprehensive plan in place. Estate planning encompasses so much more than taxation issues or complex wealth.

If you die with no estate plan, the state steps in.

The problem with the lack of an estate plan occurs when the state’s “intestacy” laws kick in and dictate how your assets are split up and passed on to your heirs. Creating an estate plan is the only sure method to make sure that your specific wishes are carried out. With no strategy, your kids might be in limbo or worse yet, in conflict. Proper preparation can also protect your family from lenders and lawsuits. No family wants to deal with debt collectors and mounting bills when they are mourning the loss of a loved one.

Your estate plan makes sure that your charities get the donations you intended to make.

An estate plan enables you to donate to a charity with confidence. Do you wish for part of your real property, personal property, or assets to go to a favorite charity? If that’s the case, the only real way to be charitable in passing is with an estate plan.  And, in case you do have worries about taxation, charitable estate planning could yield you tax breaks that you otherwise may not qualify for.

Estate plans are a must for unreliable relatives.

Sometimes, adult children aren’t as stable or responsible as you would wish. If you are concerned about your kids having total control over their inheritance, then you may even leave the funds in a trust, which allows somebody else (the trustee) to make decisions regarding how the money is utilized. This can shield your children from blowing through their inheritance as a result of bad decision-making, substance abuse issues, or just plain excess spending.

For unconventional families, estate planning is a non-negotiable

Estate preparation is absolutely vital for unconventional families. If you are part of a non-traditional or blended family, you will need an estate plan to ensure that your assets are distributed to those you consider your closest relatives. Or, if you are in a relationship aside from a conventional marriage union, your estate would skip your partner and pass to your parents or some other blood relations unless you have an established estate plan. Making certain that this does not occur is reason enough to hire an experienced estate planning attorney. Please contact our Ruston, LA office by calling us at (318) 255-1760 or schedule an appointment to discuss how we can help with your long-term care needs.

 

Baby Boomers in the New Decade

According to the US Census Bureau (Bureau of Census), their numbers are estimated to be 73 million strong in 2020. The baby boom generation is comprised of those Americans born 1946-1964. This generation represents nearly 20 percent of the American public. As they enter their 60, 70, and 80th decades, their influence will help to guide how billions of federal funds will be spent on critical public services like health care, housing, and social safety net programs like social security. The guiding forces behind baby boomer life in the 2020s are high expectations during a much longer retirement, more investment choices but less investment safety, and rising interest rates. There is more of a reliance on personal savings instead of pensions (which are often underfunded), while the gap of aging success between the rich and the poor remains.

As a demographic group, baby boomers wield the most financial power of any living generation.

Business Insider

As such, they continue to have a powerful impact on the direction of the US economy. Aside from federal spending, baby boomers are a significant focus of the marketing campaigns and business plans of many corporations. As a generation, they are also shifting focus from lifespan to healthspan. The all too cliché phrase 60 is the new 40 is rooted in how many baby boomers feel, more active and vibrant than ever before, and with a bank account to command attention and buy freedom of choice. An extension of this wellness trend is a retiring populous that is busy traveling, running marathons, building homes, starting new businesses and new chapters of life. Mindfulness and wellness are hallmarks of this generation, and it is leading them to a higher quality of retirement life.

Despite this aggregate of optimistic financial data, there is evidence suggesting the current poverty rate of 9 percent in the elderly American population will remain steady in the coming decade. Approximately 7 million older people will be living without sufficient income to meet housing, utilities, food, and medical needs. Many more baby boomers may fall into the poverty category in the 2020s because of insufficient retirement planning. Addressing this inequality will be challenging as successful aging is in large part due to financial stability as the rich are living longer while the poor are dying younger. Measuring retirement security then is based on overall healthspan (the number of years you can live independently) and wealth span (the amount of money over time you have available for your non-working years). The success of baby boomers’ retirement is generally defined decades earlier by a person or their spouse’s education level, work history, economic affluence and accumulation throughout their working years with a bit of luck tossed in.

The time in which baby boomers have had to accrue wealth has been primarily an economic boom cycle with a couple of economic corrections and downturns, most notably the Great Recession of 2008. Depending on how a baby boomer may have been financially positioned during these times can be the difference between substantial personal savings and struggling to meet retirement income needs. The equivalent purchasing power of one dollar in 1980 is $3.12 in 2020. A steadily increasing interest rate and an overall lessening of the dollars purchasing power can make fixed income living a precarious situation. Additionally, the cost of living adjustment (COLA) through social security benefits is not favorably weighted to living expenses of the aging US population. The deregulation and rules of financial vehicles that offer low to no tax rates like IRAs, Roth IRAs, annuities, life insurance policies, and more are continuously amended, mostly in the economic favor of the government or corporations offering the financial options. Even private and government pensions are not safe from payout reductions. The Social Security Administration (SSA) is admitting that without legislative reform to its program, social security benefits will only meet 75 percent of scheduled benefits by the year 2035.

The socioeconomic impact of the baby boomers will be an active force throughout the 2020s. As a generation, they are morphing the word “retirement” into the notion of a transitional life phase as they seek to repurpose their lives rather than sit on the proverbial front porch swing. Creative and inventive life shifts are inevitable as baby boomers spend down their wealth and money-making institutions, private or government, are poised to earn or tax those dollars.

We help baby boomers create comprehensive estate plans that focus on their current health and financial needs and the needs of those they wish to leave an inheritance to. Give us a call at (318) 255-1760 and schedule an appointment to discuss how we can help you.