Receiving an inheritance is both an honor and a responsibility, and Atlanta estate planning attorneys constantly see individuals who are just not ready to take that on appropriately. Unlike items of sentimental value, such as jewelry or family heirlooms, a financial inheritance was likely meant to be used toward your own monetary goals. The temptation to simply spend away an inheritance as “bonus” money can be strong, but there are a whole lot of very practical means by which to manage the funds for your own future.
When you receive an inheritance, you should look at how it fits into your overall financial plan. Are you saving for a particular purchase, working toward paying off debt, or building a retirement fund for yourself? These are all potential uses for the money which has been left to you. You should also be aware that inheriting the funds may have tax implications. Your Atlanta estate planning attorney will be able to guide you when it comes to ways of reinvesting or living off of the inheritance in order to minimize the amount of taxes you will need to pay.
The types of inheritance you receive can certainly vary, with stocks, bonds, bank accounts, and insurance benefits all being possibilities. The different types of sources and dispersal of funds may be governed by certain rules or laws. For example, many people are surprised when their Atlanta trusts and estates attorney tells them they can have a limited amount of time to withdraw funds from an inherited retirement account, like a 401(k), 403 (b), or and IRA. The rules and regulations won’t be the same for every type of account, but if you don’t find out what they are, you can end up paying a lot of penalties and fines out of the money you’ve inherited.
There may also be times when you feel you don’t need the money as much as another beneficiary and are willing to forego your share. This might be for altruistic reasons or simply to protect your own tax situation. In this case, you can work with your Atlanta estate planning attorney to properly disclaim your inheritance. Doing something along these lines can allow the money to “flow” through you and to another beneficiary, possibly even one of your own children.
When it comes to managing your inheritance, there can be many complications to work through, and one of the best ways to minimize confusion is to work with a qualified and experienced Atlanta estates attorney. Remember, the type of inheritance, your future goals, your tax situation, and even whether or not you “need” the inheritance will all come into play when determining what is the best route for you to take.
Our attorneys are ready to answer your questions and assist you with the implementation of your financial goals. To schedule a complimentary Georgia Family Treasures Planning Session with the mention of this article, simply call our office at 770-425-6060 or email us at firstname.lastname@example.org.
We are fast approaching the holidays, when travel is the busiest and careful planning is necessary to nab the best airfare or book that New Year’s beach cottage before it slips away. One thing that is probably not on your travel to-do list is estate planning, but it should be so you can travel with peace of mind.
Here are some tips to pack away your worries before you board that flight:
Complete your estate plan. If you’ve been putting it off, now is the time to complete your estate plan. If money is a consideration, then start with those the most important items: a will, power of attorney and advance health care directives.
Update an existing estate plan. Has something changed in your life since you last updated your estate plan? A birth, a death, a marriage, a divorce? Each of these triggers your need to update your estate plan.
Establish guardianship for minor children. If you have ever gotten a nagging fear about what would happen to your children if something were to happen to you, then use that fear to follow through on naming a guardian for raising your minor children. If you have young kids, there is never an excuse for you to neglect this important step.
Review beneficiaries. Beneficiaries of your retirement accounts, life insurance and other assets must be kept current or your assets will not pass to them upon your death. If you have minor children, you will need to set up a trust and name the trust as beneficiary so your assets can pass without court intervention.
Review/update incapacity documents. Two very important health care documents – a durable power of attorney for health care and a HIPPA Authorization – will determine who can make medical decisions for you and who has access to your medical records in case of incapacity. Be sure you have these documents before you travel and that the person/people named are still valid.
Review/update insurance. Does your life insurance coverage still meet your family’s needs? If not, it is time to update your insurance policy before you hit the road.
In addition, you need to be sure you have an organized file of all your accounts and estate planning documents and you need to tell your family where they can locate the file if and when it becomes necessary.
The time to create a plan that spells out how you will pass on your values, beliefs and your money to your children is now. You can begin by calling our Atlanta estate planning law office today at 770-425-6060 to schedule a time for us to sit down and talk. We normally charge $750 for a Georgia Family Legacy Planning Session, but because this planning is so important, I’ve made space for the next three people who mention this article to have a complete planning session at no charge. Call today and mention this blog post.
Image courtesy of Nujalee at FreeDigitalPhotos.net
Three-time New York City Mayor Ed Koch died on Feb. 1, leaving an estate estimated between $10-$11 million. And it’s a good thing that “Hizzoner” loved governing, because one-quarter of his estate will be going to the state and federal governments.
During his tenure as Mayor, Koch was famous for asking people on the street, “How’m I doin’?” He would have been better served to ask that same question to a Family Estate Planning Lawyer before he passed on.
In his will, Koch bequeathed most of his assets to blood relatives – a sister and her husband, a sister-in-law, and three nephews – as well as to his secretary and a charity. And because Mayor Koch used a Will and didn’t put his assets in Trust, it’s all public. In fact, you can read the details of exactly what Mayor Koch left behind and to who right here.
When the former Mayor died, the federal estate tax exemption was at $5.25 million; and since his estate is estimated at twice that amount, Uncle Sam will net a cool $1.45 million. New York State has an estate tax exemption of just $1 million, meaning it will receive $1.1 million from the estate, according to a Forbes article.
As Forbes notes, Koch could have made some savvy estate planning moves before he died by:
Creating a trust for the benefit of his nephews, who inherited the bulk of his estate, and their descendants. Up to $5.25 million that goes into a trust would have been exempt from generation-skipping transfer tax. (And, would have protected those assets for generations upon generations. This was a big oversight.)
Making additional gifts up to $5.25 million right before he died could have significantly reduced his state tax bill, since New York does not have a gift tax. This would have saved his heirs an estimated $600,000.
And there’s more he could have done as well, but he either didn’t get good counsel or he didn’t heed it. Now, it’s too late. And, of course, it’s all public.
If you would like to learn more about strategies to keep your money out of the government and the size of your assets totally private, call our office today to schedule a time for us to sit down and talk. We normally charge $750 for a Georgia Family Treasures Planning Session, but because this planning is so important, I’ve made space for the next two people who mention this article to have a complete planning session at no charge. Call today and mention this article.