Many people start to think about having or updating their estate plan when they are in their 60s. One thing that is of utmost importance when developing and/or updating your estate plan is your “life plan.” Let’s use Frank and Mary as typical clients here:
- When do Frank and Mary want to apply for Social Security?
- There is no longer a penalty for early withdrawals of IRA or 401(k) funds, so does it make sense to start to take withdrawals now, or wait until they are 72? How does that affect their current taxes? Should they be converting funds to Roth IRAs? Do they want the flexibility that comes from knowing that if they later need to qualify for MassHealth by withdrawing these funds, the funds won’t all need to be withdrawn at the same time?
- Frank and Mary may still have wills that name guardians for their now grown children. On the other hand, those “children” may now have other issues (addiction, financial problems, marital problems, etc.) that may warrant additional protection for the funds of Frank and Mary (but especially the survivor of them if one of them has died) that these “troubled” children might otherwise inherit.
- Frank and Mary had named each other a primary agent (or at the time, named a sibling), and did not have a backup designated as their powers of attorney and healthcare proxies. Might make good sense to re-evaluate those decisions.
- Frank and Mary may very well be a lot wealthier (although they might not notice it) than they were when they executed those wills 10 or 20 years ago. If their combined assets (including possible life insurance payments if one of them dies) exceeds $1M, they may want to look at structuring things so that they do not end up leaving some of their assets to the Massachusetts Department of Revenue (through the estate tax) instead of their children.
While there are common issues and concerns, each situation is unique. It is important that Frank and Mary (and you) have a team of experts that they trust. Typically, an attorney who specializes in elder law, an accountant or tax planner, and a financial planner — all of whom look at things from a different perspective and will provide valuable advice when it comes to developing a plan that fits Frank and Mary’s needs and wishes for the remainder of their life and after death. For more information, visit Frank and Mary’s YouTube channel, youtube.com/elderlawfrankandmary. These programs also air on MVTV (Comcast 13). If you have any questions, please contact me at 508-860-1470 or abergeron@mirickoconnell.com.
Arthur Bergeron is an elder law attorney in the trusts and estates group at Mirick O’Connell.
