The Wagner Law Group | Est. 1996

Sophisticated Legal Solutions And Boutique-Style Service

FAQs on Estate Planning and Retirement

On Behalf of | Mar 12, 2015 |

My spouse and I spend winters in Florida and are considering making Florida our legal residence. We have been told that aside from the weather, Florida offers a favorable “tax climate.” Is that true?

Yes, for several reasons. For example, Florida has neither an income nor an estate tax. (New York’s top estate tax rate is 16%!) Changing one’s domicile to Florida also brings about important non-tax consequences, most of which are favorable. We will deal with these in future newsletters. Bear in mind that such a move may be scrutinized by the state from which you are moving; particularly if you plan to maintain some ties with that state. (For example, should you wish to keep a home for use in the summertime.) We will also discuss how to change domicile effectively. Please stay tuned!

What are the most important estate planning questions that soon to be retired people need to answer?

Retirement by any reasonable standard is a major life cycle event. Thus, planning for retirement should include a review of one’s estate plan. Whether changes are necessary depends upon individual facts and circumstances. And depending in part on how much time has elapsed since the last review, facts and circumstances may have changed significantly. Thus, revisiting the basic questions is important:

  • Who are my beneficiaries? 
  • In what manner – outright or in trust – should their inheritance be structured? 
  • Are beneficiary designations of non-testamentary assets (such as retirement plans and IRAs) current? 
  • Given the very significant and numerous changes in the tax laws over the last several years, should tax issues be addressed? 
  • To whom shall I entrust the administration of my estate – Executors, Trustees, etc.? 
  • Are documents such as a durable power of attorney and health care proxy current?

Should you tell potential heirs about your estate plan?

As a general rule, yes. Certainly exceptions exist, and each family’s circumstances should be addressed. But absent special circumstances, discussing the estate plan with family members is helpful and very often will avoid post-death conflicts that might otherwise arise if certain members are not convinced that documents reflect actual intent. (“I don’t care what the Will says, I know Mom wanted me to have her engagement ring.”)

Does retirement make any real difference in your estate plan? For instance what impact does losing employer paid life insurance make?

Retirement from employment may and very often does bring about significant changes in one’s financial circumstances. From an income standpoint, employment related compensation will be replaced by retirement benefits and accumulated savings. Employer-provided health insurance may no longer be available. Term life insurance provided through employment will likely terminate. Even personally owned term insurance may be too costly to continue. Thus, while we function as legal rather than financial advisors, we do recognize the importance of a review of one’s financial circumstances and the need for understanding how one’s financial life will be different in post-retirement years. (The “golden years” are not so gold if the gold is lacking.)

With people living into their 80s and 90s, should you expect to have to revise your estate plan?

Making generalizations is difficult, because individual situations differ so greatly. But regardless of age, we recommend that at least every five years, a client review his or her estate plan to determine whether any changes are necessary. In our view, the need for periodic review and possible updating increases rather than diminishes in post-retirement years.

We all hate to face our mortality. Why is it important for people in their 50s and 60s to have an estate plan?

Estate planning is generally defined as the process by which one arranges an appropriate disposition of his or her net worth to desired beneficiaries without incurring unnecessarily high transfer taxes. Thus, estate planning is important for anyone who has accumulated net worth; and also for anyone with young children, regardless of financial circumstances. Young adults, for example, may have little need for sophisticated tax planning, but considerable need for appropriate documentation to designate a guardian for their kids. People in their 50s and 60s are no different.

We do need assistance with our financial and estate planning. How can Wagner Law Group help?

We offer no investment advice and sell no product. Wagner does however, offer the services of experienced estate planning attorneys. We believe in a “team approach” to estate planning and work closely with your other advisors, such as your accountant, insurance agent, and investment advisor. Biographical information on individual attorneys is available on our Firm’s website.