Retirement Answer Man

Have you ever had to deal with closing an estate? Mark Ross happens to have the unfortunate experience of helping to close out 4 different estates in a short period of time. Since experience is the best teacher, Mark joins me today to discuss his experience with the probate process. He’ll share how he dealt with his feelings during the process, how long it took, how he managed, and what he thinks you can do to organize your own estate. Give your heirs the gift of an organized estate by learning all you can now to help ease the probate process.

Organization can be a gift to your heirs

In helping to close out 4 different estates in a short amount of time, Mark Ross learned a lot about the differing levels of organization in estate planning. Probate is a long and complicated process that can be even more challenging if you don’t have all of the pieces of the puzzle. Mark learned that when an estate is well organized the process is so much easier. He feels like that organization was a gift that helped him through the probate process. 

How should you organize your own estate plan?

Mark’s main piece of advice in organizing your own estate plan is to get an attorney that is a good fit for you and your personality. He also recommends that you keep meticulous records of all conversations regarding your estate. 

Since family dynamics can play a role when money is involved it is important to be clear about the flow of money. 

One last piece of advice he has is to never be a coexecutor. He found that that situation could drag out the emotional journey even longer than it needs to be. An executor needs to be able to have the accountability to make difficult decisions. 

How organized is your estate plan? Is it updated to reflect your current situation?

3 things you can do to gain confidence in your financial plan in retirement

If you don’t have confidence in your financial plan you won’t be happy in retirement. There are 3 things you can do to gain more confidence in your plan. 

  1. Understand how your financial plan reflects your personality. There are a couple of different ways that you can go about planning your finances in retirement. With a probability-based or investment based plan, you will have a portfolio that generates enough income to live on. The second style is the safety-first style. This means having your basic expenses covered by guaranteed income like social security or a pension.

    These two very different planning styles optimize for different things. Make sure the style you choose to follow reflects your personality. 

  2. Educate yourself. Many families have one who invests and the other doesn’t. Both partners need to be educated to have enough understanding to be confident in the financial plan. Hope isn’t good enough. Get a plan you are both comfortable and have confidence in.

  3. Have an emergency fund and a “fun” fund. Sure, this is just a psychological trick but it could give you peace of mind. 

How confident are you in your retirement plan?

OUTLINE OF THIS EPISODE OF THE RETIREMENT ANSWER MAN

WHAT’S THAT MEAN?

  • [2:07] What is the difference between information and knowledge?

PRACTICAL PLANNING SEGMENT

  • [7:41] How do you balance the obligations of the estate with your feelings?
  • [13:04] They have been able to learn and prepare for the estate closure over time
  • [14:36] How should you organize your own estate plan?
  • [16:54] How to deal with differing interests?

COACHES CORNER WITH BW

  • [20:27] If you don’t have confidence in your plan you won’t be happy in retirement
  • [23:01] Paying off your mortgage can mean so much to some people
  • [27:45] Have an emergency fund

TODAY’S SMART SPRINT SEGMENT

  • [33:03] Think about the past year: what were the best and worst decisions you made

Resources Mentioned In This Episode

Rock Retirement Club

Roger’s YouTube Channel - Roger That

BOOK - Rock Retirement  by Roger Whitney

Work with Roger

Roger’s Retirement Learning Center

Direct download: RAM336.mp3
Category:general -- posted at: 6:00am CDT

By now you know how important estate planning is in retirement. But what is also important is to organize and communicate your wishes to your loved ones. In this episode, you’ll learn how to organize and communicate your estate planning wishes. We’ll chat with Sarah Bunnell from Everplans who will let you know how and why organization and communication are so important. Listen in to hear her expert take on these matters. And make sure you are signed up for the 6-Shot Saturday email so that you can receive an essential document checklist. 

An estate plan that is not organized or communicated correctly misses the point

Let’s say that you have just finished your estate plan. Congratulations on putting that all together! Now that you have completed this first step it is imperative that you take that next step and communicate your wishes to your loved ones. Once you get your financial assets and legal records organized then you’ll want to ensure that your loved ones know about them. The probate process is very involved so the more information that you can give them now will save them time and worry during an already stressful period. 

Who should you communicate your estate plan to?

Once you get your estate plan set up you’ll need to think about who you want to share it with. Do you have a trusted financial advisor? A CPA? An attorney? Who will be your point person? You’ll also want to make sure that you tell more than one person in your family. What would happen then if the family member that has all the information was involved in an accident with you? If you are single you’ll also want to consider who your trusted team may be. 

What about organizing your digital life?

Almost everybody knows that you should have a will and a medical directive. But what about your digital estate? How will your family access your digital files? Is your digital estate a mess? In these modern times of paperless statements, your heirs may not know what kind of accounts, insurance policies, or even properties you own. Without the passwords to the myriad online accounts, they won’t be able to make the payments or changes that they need to in the event of your passing. 

A bit about Everplans

Everplans is an online digital vault that we use in the Rock Retirement Club. This online organizational tool stores all the estate information you would need to have organized. Everplans allows you to share information on a piece by piece basis either now or after death to the important people in your life. You can store funeral plans, wills, trusts, financial statements, even recipes, and videos. Learn more about Everplans and organizing and communicating your estate plan on this episode of Retirement Answer Man.

OUTLINE OF THIS EPISODE OF THE RETIREMENT ANSWER MAN

WHAT DOES THAT MEAN? 

  • [1:50] What is an emergency plan?

PRACTICAL PLANNING SEGMENT

  • [4:18] Why is the organization of your financial assets and legal records so important?
  • [6:50] What are the essential elements of an organized estate plan?
  • [14:30] How important is it to organize
  • [19:45] A bit about Everplans 

Q&A SEGMENT

  • [26:10] You can do qualified charitable distributions at age 70.5
  • [28:08] A state pension offset question
  • [29:38] Baby boomers retiring and taking money out of the market
  • [33:21] What did I end up doing for medical insurance?

TODAY’S SMART SPRINT SEGMENT

  • [39:20] Lessen the impact of loneliness in the pandemic by calling a loved one

Resources Mentioned In This Episode

EverPlans.com

Rock Retirement Club

Roger’s YouTube Channel - Roger That

BOOK - Rock Retirement  by Roger Whitney

Work with Roger

Roger’s Retirement Learning Center

Direct download: RAM335.mp3
Category:general -- posted at: 6:00am CDT

Many people choose to give to charity as a way to give back to their community. If you are overfunded you may decide to give to charity while you are still alive as well as part of your estate after you pass. On this episode of Retirement Answer Man, we’ll continue the estate planning series to discuss different ways that you can give charitably now and as part of your estate. Stick around to hear the Q&A session with my esteemed guest Peter Lazaroff. 

What is a charity?

U.S. citizens are known for being extremely charitable people. Although many people help others as individuals, a charity is an organization that uses money and human capital to make a greater impact in the world. Different charities have different motivations and missions. When choosing a charity to give to it is important to look at its mission but also to make sure that the organization is a good steward of the money it receives. 

What motivates you to give?

Each of us has a different motivation to give to charity. Maybe your reasons are personal, or perhaps your life was affected by a certain event. Some people practice charitable giving as a way to model good citizenship to their family. Others are overfunded and use charitable donations to help ease their tax burden. For whatever reason you choose to give to charity it is important to make sure to find organizations that match your values. Why do you choose to give to charity?

How you can give to charity in life

There are several ways to give to charity now while you are still alive.

If you are over 72 you may find that your RMD is more than you need. You can solve this problem and reduce your tax burden by making a qualified charitable distribution. You can give to one organization or spread out your contribution among several charities. 

You can donate appreciated assets and avoid capital gains. If you donate all or a portion of appreciated assets directly to a qualified charity you can avoid capital gains. This could help you rebalance your portfolio or reposition your assets. 

Use a donor-advised fund (DAF) like your own charity. With a DAF you can donate cash or assets. It’s like a simple version of a private foundation. You can choose one or many different charities to give to. Listen in to hear how you can involve the family in your charitable giving. 

Use a trust in tandem with your charitable giving. Charitable remainder trusts or charitable lead trusts are a bit more complicated and require the help of an attorney. 

How to give in an estate after you pass 

There are basically 2 ways that you can give to charity in your estate once you pass. You can either make a bequest in your will or name the charity as a beneficiary of an asset. The most simple and direct way is by making a bequest in your will. If you chose to name a charity as a beneficiary in an IRA asset then the charity would pay no income tax on that asset. How would you prefer to give to charity? 

OUTLINE OF THIS EPISODE OF THE RETIREMENT ANSWER MAN

WHAT DOES THAT MEAN?

  • [3:08] What is charity?

PRACTICAL PLANNING SEGMENT

  • [7:04] What motivates you to give to charity?
  • [9:30] How to give to charity while you are still alive
  • [22:44] How you can give your estate

Q&A WITH PETER LAZAROFF

  • [26:44] Peter describes when decided to create his own estate documents
  • [30:38] Will a Roth conversion send your assets over the income limit?
  • [33:33] How to become a financial planner later in life
  • [44:30] How to navigate stock risk with your company

TODAY’S SMART SPRINT SEGMENT

  • [52:52] Examine your charitable giving to look for planning opportunities

Resources Mentioned In This Episode

XY Planning Network

PeterLazaroff.com

Rock Retirement Club

Roger’s YouTube Channel - Roger That

BOOK - Rock Retirement  by Roger Whitney

Work with Roger

Roger’s Retirement Learning Center

 

Direct download: RAM334.mp3
Category:general -- posted at: 6:00am CDT

Retirement is often the time when people begin to think more about estate planning. On this episode in the Estate Planning series, we’ll talk about giving. You want to be able to give to your loved ones but you also don’t want to rob them of their problems. That’s why we’ll discuss how you can give without enabling and you’ll discover how to optimize the impact of your gift. You’ll also learn how to decide whether you have enough to give. When you begin to think intentionally you’ll see that there are so many ways to give. 

Do you have enough to give?

It would be amazing to be able to give to your loved ones before you pass, but how will you know whether you have enough? The first hurdle in giving is being comfortable giving away your assets. What if you need that money later on? Actually that’s not so hard to figure out. Often times you’ll see that deciding how to give is less a money question than a mindest question. To be comfortable giving away assets you need to understand your level of fundedness. Are you underfunded, constrained, or overfunded? Once you understand this then you can begin to put a plan in place for giving.

How can we give intentionally?

We give for many reasons. A gift is an item that you give someone without an expectation of payment in return. Giving is a way to express feelings and emotions and share those feelings with the receiver. You may not want your gift to your heirs to come in the form of a check from an attorney several months after your death. There are more intentional ways that you can give so that your family can feel the love behind that gift. 

Enhance don’t enable

As parents, we would love to solve all of our children’s problems for them, but then we would be robbing them of that learning opportunity. One of the best gifts we can give our kids is not robbing them of their problems. We need to find ways to help them but also allow them to figure things out for themselves. There are ways that we can give to them that enhance their lives rather than enabling them. 

There are many ways to give before you pass

Create memories - I think this is a fantastic way to give and to be able to enjoy that gift as a family. You could rent a house at the beach and help subsidize the family trip. Spend money to bring the family together. 

Annual gifting - You can give anyone $15,000 per year without reporting it. You could help fund their Roth IRA or help buy them a house. You might be surprised when you find out how much the lifetime gift exemption is. 

The gift of education - There are many ways to give for education. You can pay for college tuition directly. You could fund the grandkids 529 plan and allow the money to grow tax-free. You can also use up to $10,000 per year to fund a pre-college education if your grandkids are in private school.

OUTLINE OF THIS EPISODE OF THE RETIREMENT ANSWER MAN

WHAT DOES THAT MEAN?

  • [2:20] What is a gift?

PRACTICAL PLANNING SEGMENT

  • [6:50] How do you give more intentionally?
  • [10:45] We don’t want to enable we want to enhance
  • [14:55] Retain optionality
  • [16:12] Ways to give
  • [27:43] What is a trust?

Q&A SEGMENT WITH TAYLOR SCHULTE

  • [36:59] Should we be investing in ESG funds in the “new normal”?
  • [44:08] A rainy day fund question
  • [52:18] A tax bracket question

TODAY’S SMART SPRINT SEGMENT

  • [60:06] How do you want your assets to be distributed?

Resources Mentioned In This Episode

Stay Wealthy podcast with Taylor Schulte

Define Financial

CuriousHistory.com

Rock Retirement Club

Roger’s YouTube Channel - Roger That

BOOK - Rock Retirement  by Roger Whitney

Work with Roger

Roger’s Retirement Learning Center

Direct download: RAM333.mp3
Category:general -- posted at: 6:00am CDT

One important aspect of retirement that not everyone is prepared for is estate planning. People avoid estate planning for various reasons, but a properly done estate plan is more than just documents. An estate plan is a way of continuing relationships and loving those people you leave behind in ways that you may not even imagine. Today we are kicking off our monthlong series on estate planning and we are starting with the basics. Listen in to hear what kind of documents you should have in place but also why they are important. 

What is estate planning?

Everyone knows they should have an estate plan, but very few have or understand what estate planning really is. Estate planning is the process of anticipating and arranging the management and disposal of your financial and legal life. The good news is that if you don’t have an estate plan the government has one for you. The bad news is that it probably won’t reflect your wishes. Done correctly, estate planning can be an important gift that you leave to those you care about. 

Why have an estate plan?

Some people may be fine without a plan and having the state doling out their worldly possessions. The purpose of an estate plan is to close out your financial life. When you pass away you probably don’t want to leave your loved ones with a financial and legal mess. Planning your estate in advance is one way to give a gift of elegant simplicity to your family. 

What does an estate plan involve?

  • Probate - When you pass away the process by which the state goes through closing out your legal and financial life is called probate. 
  • A will - A last will and testament is a document that designates where your assets will go, but there is quite a bit of paperwork involved so an executor is named to manage the paperwork and distribute the assets based on your wishes. 
  • Beneficiary driven accounts - These accounts have beneficiaries chosen when you set up the account. Beneficiary driven accounts include 401K’s, 403B’s, IRA’s, etc. The benefit of having a beneficiary listed on these accounts is that they get out of probate quickly and transfer quickly and directly.
  • Power of attorney - Another important document to have in place is a durable power of attorney. This gives a specified person the power to make decisions for someone who is incapacitated. 
  • Healthcare power of attorney - This document allows you to appoint someone to make healthcare decisions for you should you not be able to. If you don’t have one in place it could delay treatment. You can also specify specific situations in which you may not want life-saving actions. 

How often do you review your estate plan?

There is more to estate planning than just having these things in place. I am not a professional estate planner. Think about talking to an estate planner to help you plan your estate. And remember that it is important to periodically review your will and beneficiary driven accounts. Do you have an estate plan in place? When was the last time you reviewed it?

OUTLINE OF THIS EPISODE OF THE RETIREMENT ANSWER MAN

WHAT DOES THAT MEAN?

  • [3:06] What is estate planning?

PRACTICAL PLANNING SEGMENT

  • [4:34] An example of why estate planning is important
  • [9:14] What are the basics of estate planning?

Q&A WITH TANYA NICHOLS

  • [21:58] Should a woman seek to work with a female financial planner?
  • [26:49] Should you plan leveled withdrawals in retirement?
  • [35:09] How to factor secure income
  • [45:41] Why do we use average rather than the median in market assumptions?

TODAY’S SMART SPRINT SEGMENT

  • [51:02] Review your estate planning documents

Resources Mentioned In This Episode

Align Financial

Rock Retirement Club

Roger’s YouTube Channel - Roger That

BOOK - Rock Retirement  by Roger Whitney

Work with Roger

Roger’s Retirement Learning Center

 

Direct download: RAM332.mp3
Category:general -- posted at: 4:23pm CDT

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