Most people spend a lot of time planning for the financial side of retirement. However, once retired, there are a few estate planning tasks to do. Your life has likely changed since the first time your estate plan was done, says the article “5 Estate Planning Changes To Make After Retirement” from Go Banking Rates. Get ready for the next phase of your life with an update to your estate plan.
This is especially true with the SECURE 2.0 Act measures coming into effect this year. Retirees need to address new rules regarding catch-up contributions, required minimum distributions (RMDs), Roth IRA matching and more.
If you’ve retired already, here are estate planning basics to be reviewed. They should also be considered every three to five years, or after any significant life event, like the passing of a spouse, the birth of a grandchild, or changes to tax law.
Revise current estate planning documents. You’ll want to be sure the beneficiaries, executors and trustees in your will and trusts are still the right people. Review Power of Attorney documents for medical and financial decisions. If you have a trust, ask your estate planning attorney if you should have a pour-over will so any assets not already in the trust will be captured and protected from probate.
Check on beneficiary designations. Relationships change over time, so review accounts with beneficiaries. Beneficiary designations override any provisions in your will, so you could unwittingly give a nice surprise to your old college roommate if you haven’t updated these important documents in a long time. Check life insurance policies, retirement and investment accounts and accounts with payable on death (POD) designations.
Proactively address tax planning. If your budget allows, you can gain tax advantages by gifting up to the maximum yearly tax exclusion, which is $19,000 per person in 2025. Consider making charitable contributions using a charitable trust or donor-advised fund. Talk with an estate planning attorney about how your estate plan can be a source of tax savings.
Plan for Long-Term Care Costs. No one expects to need long-term care. However, approximately 70% of people over age 65 will need LTC services and support. You may need a Medicaid Asset Protection Trust (MAPT) to protect assets, which should be prepared well in advance of the five-year lookback rule. If you don’t have LTC insurance, a hybrid life insurance plan with an LTC rider may be an option.
Plan for any new assets. Estate plans are flexible documents needing updating when new assets are acquired at any point in time. Just because you’re retired doesn’t mean a new property or piece of valuable art doesn’t need to be appraised and included in your last will and testament. If retirement brought the purchase of a second home or the sports care you always wanted, add these new assets to your estate plan as well.
Consult with an estate planning attorney to update your estate plan to protect your retirement and your legacy. Don’t forget to speak with family and heirs, so they know your wishes to avoid confusion and family battles in the future.
Legacy One Law Firm, APLC is an estate planning and probate administration law firm in Los Angeles, California, serving families throughout the State. Schedule a quick and easy consultation with our estate planning attorney, Sedric E. Collins, Esq., or call 323-900-5450.
