An article, titled “The End,” that appeared in the April 2013 issue of Benefits Selling Magazine is worth digging into. Drawing from insight shared by experts like John O. McManus, McManus & Associates founding principal, reporter Paula Aven Gladych relays valuable intel related to end-of-life planning.
What’s one of the catch 22’s that Gladych unearths thanks to McManus? “Many people don’t realize that beneficiary designations on life insurance policies and retirement accounts trump whatever is written in a final will and testament.” From the piece:
Many parents place one of their children on their accounts as a joint account holder so they can help pay bills. What most people don’t realize is that when the parent passes away, no matter what is listed in the will, the person who is listed on the joint account will inherit that money. This can cause many problems among other beneficiaries who believe they are entitled to their share of that money, McManus said.
McManus also emphasizes a seemingly obvious but often overlooked step that needs to be taken – more than once:
Individuals need to make sure their documents are current. They need to review them every so often to make sure that what people think they will receive when they die is what they will actually receive, said John McManus, founding principal at McManus & Associates , an estates and trusts law firm in New York.
That means reviewing documents and walking through their provisions, deciding how they want to dispose of their assets and naming representatives who will make sure their assets are distributed as they intended.
But, as Gladych points out, things aren’t always so straightforward – especially when it comes to the tax system. In the piece, McManus has a word of advice, which he often shares with clients:
Each state has its own exemption when it comes to estate taxes. Some states, like New York, will allow individuals to pass down the first $1 million to heirs tax free. Anything above that $1 million will be taxed. McManus counsels his clients to gift that money while they are still alive to avoid hefty taxation later.
Gladych is right: planning for the future isn’t just about retirement accounts or what you want to do with all of your free time…people also need to plan for what comes after their retirement—end-of-life planning. To find more valuable tips, read the full story.