Stages of Planning

Seniors over 70½

70½ – A Special Number

Before attaining 70½, you should review all of your estate planning documents along with those describing financial and retirement benefit planning.  

Because the age of 70½ has been magically designated by the Congress of the United States and the Internal Revenue Code as a lock-up date for certain types of tax-deferred compensation plans, it is imperative that all persons within a year of 70½ review their plans to avoid any income tax and/or estate tax complications.

The parents should prepare a Will in conjunction with a Living Trust, Durable Financial Power of Attorney, Durable Power of Attorney for Health Care, and Living Will.

The Living Trust avoids a probate estate and also has tax provisions in the event your estate has tax consequences at death. The Trust would have provisions for the surviving spouse and would have provisions if no spouse survives for distribution to the adult children and/or grandchildren.

Empty nester estate planning becomes more complicated because the children’s lifestyles have been established, and special planning may be necessary in light of the adult child’s capabilities. In some instances, an adult child may be disabled and/or become disabled.  In this event, special trust provisions must be created to avoid the interruption of governmental benefits.

In some cases, the adult child is competent, but may not be one with a great deal of financial responsibility.  This may lead the parent to consider an ongoing trust for protection of the corpus from bad decisions of the child. These matters are thoroughly discussed in estate planning and are tailored to specific client circumstances.

The foregoing stages of planning should give you an overall idea of when it is important to see your financial and/or estate planner for purposes of creating and/or updating your estate plan to achieve the maximum amount of income tax, estate tax, and unnecessary governmental interference.

Contact R.F Meyer & Associates today to schedule an appointment to discuss your Estate Planning and Elder Law needs.

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