When you lose your mate, you lose so much—your best friend, your equilibrium and your future together. Just when you’re at your lowest, it hits you: You could lose a lot of money, too.
The rise in the stock market over the past several years, teamed with the passage of the SECURE Act two years ago—as well as the scheduled 50% reduction in the size of the federal estate tax exemption four years from now—has resulted in a renewed interest in estate planning for IRA and 401(k) accounts owned by married couples.
Many people are under the impression that since they have a trust, they don’t need to do anything else. That’s not true. The trust you created years ago may not be appropriate for you now.
Unless you spend your winters in Aspen and your summers in the Hamptons, you probably don’t have to worry about paying federal estate taxes on an inheritance. In 2021, the federal estate tax doesn’t kick in unless an estate exceeds $11.7 million.
In fact, many couples with no children mistakenly believe that they are less likely to need a last will and testament than couples with children.
In the pre-SECURE Act universe, there were designated beneficiaries. These beneficiaries could be individuals (sometimes called named beneficiaries), institutions, such as charities, or estates.
Everyone, regardless of financial status or age, can benefit from having an estate plan—assuming you have assets to leave and people to leave them to.
No matter how solid the relationships might be, it is important for parents to be aware how blended families can create unique estate planning issues.
A common misconception is that you do not have to probate a will when your spouse dies.
In situations where both spouses want the surviving spouse to inherit all the assets, which is often the case, a joint trust can be far less complicated to set up and maintain than separate trusts, with less headaches for the surviving spouse.
