TRANSCRIPT:
Do you really know what will happen to your hard-earned dollars when you move on from this world? Have your beneficiaries and executor confirmed all of your wishes? Hi, I’m Hunter Brockway, founder of Boca Retirement Strategies. I’m here to guide you to a successful, stress-free retirement while helping you manage your spending and avoid excessive taxes.
In my pursuit of helping people with their financial lives, let’s walk through an estate review. As you can see, we have an estate review for a client named Bob. We build this in-house to address some of the top matters to review on a yearly basis with our clients.
First, we check the type of document you have—whether it’s a will or a trust. A will establishes your wishes but doesn’t guarantee it will pass probate or extend control beyond your lifetime. For that, you need a trust, which provides control beyond your own years.
Next, we review when the document was created. If it’s been seven years or more, it may be time for a deep dive to ensure that all your wishes remain the same, and to account for any changes in the people in your life or in your assets.
We also look at the primary beneficiary of the document and the percentage they are entitled to, as well as any contingent beneficiaries. The executor of your estate plays a crucial role and shoulders significant responsibility. It’s essential to have a conversation with your executor to ensure they are willing to take on this responsibility.
Additionally, we review powers of attorney. Depending on your state, this includes medical power of attorney and durable power of attorney. The medical power of attorney allows someone to make medical decisions on your behalf if you become incapacitated, while the durable power of attorney covers financial decisions. A health care directive outlines decisions that can be made for your health on your behalf.
We then review the beneficiaries of your accounts. For example, Bob has an IRA with Chad and Molly listed as beneficiaries, each entitled to 50%. Bob also has a Roth IRA with Chad listed as the sole beneficiary. If Bob had selected “per stirpes,” it would allow the inheritance to flow down to grandchildren if Molly were to pass before Bob.
It’s crucial to ensure all accounts have beneficiaries listed. For individual accounts, unlike qualified retirement accounts, you need to proactively designate beneficiaries.
We have a flow chart illustrating how the money would flow given Bob’s current estate plan status. Without a trust, Bob’s assets could total nearly a million and a half dollars going through probate, a costly and lengthy process. Probate could also affect the distribution if something happens to beneficiaries.
An estate plan and beneficiary review is performed yearly to avoid stress and disputes among family members. Conversations with all parties involved are essential to ensure they understand your wishes and what to expect, preventing potential family conflicts.
Finally, take action: review the discussed items, update older plans, and hold conversations with your executor and beneficiaries. For financial questions, reach out to us at contact@bocaretirement.com. Subscribe to our YouTube channel for more insights.
