When estate planning, don’t assume your heirs can maintain off your will alone. Take these steps to ensure your beneficiaries have all the wealth they need to take care of themselves and your final expenses.
Set Up a Retirement Plan
A retirement plan, such as a 401K or IRA adds extra room for comfort to your finances. Money from your 401K or IRA can benefit your heirs when paying for funeral costs, existing loan balances on a home, car or business. Having a good retirement plan not only supports you during your last days, but it will also help protect assets that your will may not cover.
Buy Life Insurance
Life insurance guarantees that your survivors will receive tax-free benefits upon your death. Policies also tend to be very flexible according to your needs, so you can adjust your policy to accommodate changes with your family, spouse or assets. Reevaluating your policy yearly will ensure all your needs are covered.
Maximize on Your Annuities
Secure a steady cash flow during your retirement by setting up an annuity. With the help of an annuity, you’ll be able to spend and save more wisely for your beneficiaries. You can also structure your annuity to pay out over the rest of your life or through a fixed timeline, such as 15 or 20 years. This flexibility gives you more options for financing your wealth.
Get a Taxable Investment Account
Once you’ve maxed out IRAs or 401ks for the year, a taxable investment account can come in the clutch for handling your financial needs. While the idea of a “taxable account” might sound off-putting, there are numerous benefits to keeping a taxable investment account. You can cash out on your assets whenever you please, reduce your tax dividend rates, minimize your long-term capital gains tax rate, and capitalize off a step-up in basis with your stocks in a taxable investment account. With a step-up in basis, your dependents will pay minimal to no taxes on their inheritance in the event of your death.
What are your concerns when drafting your last will and testament?