How Does Retirement Impact Your Estate Plan

1. Update Beneficiary Designations: Retirement accounts, such as IRAs and 401(k)s, often have beneficiary designations that determine who will receive the assets in the account after you pass away. If you haven’t updated these designations recently, it’s important to do so to ensure that your assets are distributed according to your wishes.

It’s important to review your beneficiary designations regularly, but retirement is a particularly important time to do so. If you have named someone who has since passed away, or if your family situation has changed, you may need to update your beneficiary designations. This can help ensure that your assets are distributed according to your wishes and that your loved ones are taken care of.

2. Review Your Estate Tax Situation: Depending on the size of your estate, you may be subject to federal and state estate taxes. It’s important to review your estate tax situation and ensure that your estate plan is structured in a way that minimizes your tax liability.

The federal estate tax threshold in 2021 is $12.92 million, which means that estates worth less than this amount are not subject to federal estate tax. It’s important to review your estate tax situation and ensure that your estate plan is structured in a way that minimizes your tax liability. This may involve creating a trust or making gifts to your loved ones during your lifetime.

3. Health Care Considerations: Retirement may also involve changes in your healthcare needs. You may need to plan for long-term care or consider a health care proxy to make medical decisions for you if you become incapacitated. Updating your estate plan to include these considerations can ensure that your wishes are carried out in the event of a medical emergency.

As you age, your healthcare needs may change. You may need to plan for long-term care or consider a health care proxy to make medical decisions for you if you become incapacitated. It’s important to update your estate plan to include these considerations so that your wishes are carried out in the event of a medical emergency. This may involve creating a living will, a durable power of attorney for healthcare, or a healthcare proxy.