retirement accounts

Why Make Your Retirement Fund Beneficiary a Trust?

You may seem to have two goals that are at odds. You want to set aside a nice nest egg for your future heirs to enjoy. However, you also want to build up funds so that you are comfortable after retirement, even if you live to a very old age. How can you make your estate planning and retirement planning work together? The secret may be to make your trust the beneficiary of your retirement fund.

Mistakes Heirs Make with a Retirement Fund

It may seem to make sense just to leave your retirement fund directly to a beneficiary. After all, the funds won’t go through probate. However, there are some mistakes that a grieving heir may make which could seriously affect a retirement fund. For example:

• Taking the funds too soon – Your beneficiary may not realize there are large penalties for taking the retirement money too soon.
• Taking the funds all at once – Taking the fund in such a lump sum could result in half of what you saved going to Uncle Sam instead of your beneficiary.

Leaving the funds to a trust means that you can appoint a successor trustee to help dispense the funds at the right times. This allows you to leave the fund to your loved ones but not the responsibility of knowing when best to withdraw the money.

Wise Planning for Your Family’s Future

If you have assets, including a retirement account, to leave to your heirs, contact Petrov Law Firm today by calling 619-344-0360. We can help you to settle your affairs today so that your family can enjoy a comfortable future.

Don’t Make These 3 Common Estate Planning Mistakes

Estate planning is about being as prepared for the future as you possibly can be. With that in mind, we’re going to tell you about three of the mistakes people commonly make, so you can avoid them.

Mistake #1 – Not Planning at All

The biggest mistake you can make is deciding estate planning is not for you. People make all sorts of excuses – I’m too young, I’m in good health, I don’t have that much money – but the fact is that it hurts the ones you leave behind if you don’t have a plan in place.

Mistake #2 – Not Keeping the Estate Plan Up to Date

There are certain events that should always trigger a review of your estate plan. These would include life-changing events such as a marriage, divorce, birth, adoption, the death of a successor, and the like. It would also include major financial events like suddenly receiving or losing a large asset or sum of money.

Mistake #3 – Not Preparing for Incapacitation

Many people only make plans for death and not for temporary incapacitation during life. Should you be affected by mental illness, become unconscious due to an injury or accident, or even suffer from dementia later in life, you want plans in place for the sake of both your finances and your medical care. That means appointing individuals to implement your wishes for you.

Getting Your Affairs in Order in Southern California

If you live in San Diego or any of the surrounding communities, the Petrov Law Firm would be happy to help you plan effectively for your future. Talk to our estate planning attorneys now by calling 619-344-0360. We can help you to avoid the pitfalls of trying to plan for your estate on your own.

5 Tips for Reviewing Your Estate Plan

Even once you have an estate plan in place, your job isn’t over. You need to regularly maintain and review your estate plan to make sure it accurately conveys your present wishes. We’re going to give you five tips to help you review your plans successfully without making it a burden.

1. Scan the Plan Annually – Every year you should at least look over your estate plan to make sure you don’t need to change beneficiaries, power of attorney, or other vital things such as these.
2. 3 to 5 Year Review – Every few years, you should do a more thorough review to go over your financials. Make sure you haven’t taken on any new assets that have not found their way into the plan somehow.
3. Review Income Changes – If you have a sudden influx of income or suddenly have significantly fewer assets, you will want to review your plans to make sure they still make sense.
4. Major Life Changes – Marriage, the birth of a child, the death of a successor or beneficiary, or any other major life event will require changes to your estate plan.
5. Change of Mind – Any time you change your mind about anything related to your estate plan (who gets what, funeral arrangements, medical wishes, etc.), you will want to look over your estate plan again.

Help in Making Estate Plan Adjustments in California

If, after careful review, you discover that you need to make adjustments to your estate plan, contact Petrov Law Firm in San Diego. Our estate planning attorneys can provide you the assistance you need to keep your future plans up to date with your current wishes. Call 619-344-0360 today to schedule an appointment.

Making Your Estate and Retirement Plans Work Hand in Hand

You want to save for your future, but you also want to plan for the future of your family. How can you get your retirement plan to play nice with your estate plan and ensure that you get to enjoy your golden years and still pass on an inheritance to your loved ones? Here are a few things to consider.

Your Retirement Fund Can’t Be Part of Your Trust

Your trust can’t own the retirement fund. That means you have to select a separate beneficiary for your retirement account. You can leave the retirement money and the trust to the same individual, just not with one nested under the other.

When selecting a beneficiary for a retirement fund, remember that there are tax advantages and other financial benefits to leaving these funds directly to a spouse. For example, regardless of who the beneficiary is, retirement funds don’t go through probate. They pass directly to the named beneficiary. However, only a spouse can defer minimum distribution until he or she hits retirement age.

Making Your Retirement Fund Beneficiary Your Trust

Why not simply leave your retirement fund to your loved one? What if he or she was to make the mistake of taking all of the funds at once and ends up paying half of the inheritance out in taxes the next year? That would be an expensive error. But your trustee could ensure that the retirement fund is stretched and distributions are taken at the proper times to maximize the payout.

Leaving Your Estate and Retirement Funds Behind the Right Way

Petrov Law Firm can help you to negotiate the laws that California has in place regarding estate planning and retirement funds. To get the help you need in planning for a better future, call us today at 619-344-0360.