Transferring Wealth: Why Estate Planning Matters More Than You Think

Estate planning is more than just a legal formality; it's a crucial step in securing your legacy and easing the financial transition for your loved ones.

Estate planning is a lot like designing a garden. In a garden, you consider the seasons, sunlight, and soil conditions to decide where to plant each seed. Similarly, estate planning requires you to think ahead, consider tax laws, understand your family’s needs, determine your wishes, and plan your legacy in the way you want to impact future generations.

You may use trellises, fertilizers, and protective barriers like fences to help plants grow and fend off pests. Likewise, in estate planning, you use wills, trusts, and powers of attorney to safeguard your assets and protect your loved ones’ future interests.

Most importantly, both a well-planned garden and a well-crafted estate plan don’t just 

sit there; they require constant nurturing to make sure they deliver the results you are seeking. Just as your children and grandchildren can relish the fruits, shade, and beauty of a well-tended garden, they can also benefit from a thoughtfully planned estate that provides financial security and potential peace of mind.

Without a detailed estate plan, you could face:

  • Your heirs getting entangled in a prolonged, expensive probate process
  • Losing a say in how your assets are allocated after both spouses have passed
  • Your heirs bear the brunt of steep estate taxes, reducing their inheritance
  • Potential family disagreements about asset distribution
  • Missing the chance to donate to charities close to your heart
  • Unplanned beneficiaries getting a share of your assets

Check out our popular Quick Guide, “Mapping Your Journey: The Four Pillars of Smart Retirement Planning


Keep Your Estate Plan Current

Keeping your estate plan up-to-date is important, especially if you or your heirs have experienced significant life events. Here’s why:

  • Your estate plan must outline clear directives for asset distribution to minimize any potential legal disputes.
  • Periodic plan reviews can help you adapt to new tax laws, thereby preserving your estate’s value by adhering to tax-efficient principles.
  • Your family structure might change due to marriage, divorce, new additions, or the loss of a loved one. Updates to your estate plan will reflect these events, aligning your current preferences and circumstances with your future goals.
  • If you own a business, your estate plan is essential for outlining succession and ownership transfer if something unexpected happens.

SGL Financial Insights: Your estate plan should be something other than a ‘set-it-and-forget-it’ document gathering dust in a closet. It should evolve along with your life because it is an integral part of your comprehensive wealth management strategy, whether you’re approaching retirement or are already enjoying your Golden Years. Our team of experienced financial professionals, including CERTIFIED FINANCIAL PLANNER™ holders, are committed to helping you pursue your financial ambitions.

Update Your Trust After the Loss of a Spouse

The passing of a spouse is sad and emotionally draining. The last thing you need is to grapple with financial and legal issues during periods of extreme grief. Unfortunately, updating your trust is crucial during this period of extreme grief and is necessary for several reasons.

Your list of beneficiaries, previously including your spouse, will need immediate revision. An in-depth review of your complete estate plan might also be necessary.

Trusts offer control over asset management and distribution of assets to heirs and nonprofits. Post-loss adjustments help you maintain control and make needed changes for future asset distributions. One of the significant advantages of a trust is bypassing probate, which can be costly and time-consuming. Quick updates to your trust after a loss help preserve this benefit.

Tax implications can arise with beneficiary or ownership shifts. An updated trust lets you assess these effects and adjust to lessen the tax burden on heirs. Prompt updates to the trust can also provide asset protection measures for beneficiaries, guarding against unintended asset exposure in a changing world, and having a dependable team of wealth management experts is invaluable. 

SGL Financial Insights: Our estate planning service incorporates a personalized touch, coordinating closely with your estate attorney, CPA, and other experts to offer a well-rounded wealth management solution for affluent individuals, families, and business owners.


Listen to our recent podcast: “Demystifying RMDs-The Basics to Know.”


RMDs and Their Impact on Your Estate Plan

Required Minimum Distributions (RMDs) are another pivotal part of estate planning that should be considered, especially if you still have current retirement accounts that are tax-advantaged. 

The effect RMDs can have on your estate and heirs is important to understand and address as part of your estate planning process.

When your heirs inherit a retirement account, such as an IRA or 401(k), they are typically required to take RMDs. These RMDs are subject to specific tax rules:

  • The timing of RMDs for your heirs depends on their relationship to the original account holder. 
    • Spouses who inherit a retirement account have options such as rolling the funds into their own IRA or taking RMDs based on their life expectancy. 
    • Non-spouse heirs, on the other hand, usually have to start taking RMDs by December 31st of the year following the original account holder’s death.
  • The amount of the RMD is determined by various factors, including your heir’s age and the account’s balance. Failing to take the required distribution can result in substantial tax penalties.
  • Additionally, it’s important to note that RMDs from inherited retirement accounts are generally subject to income tax. The tax rate depends on your heir’s tax bracket. In some cases, beneficiaries may have the option to spread the tax liability over several years.

SGL Insights: Your heirs who inherit retirement accounts must be aware of the RMD tax rules, including the timing and taxation of these distributions, to ensure compliance with IRS regulations and avoid unnecessary penalties. Our focus is to address these issues ahead of time so your estate plan accounts for these events, taking undue pressure off of your loved ones so they can benefit from your lifetime of hard work.

Why Choose SGL Financial for Your Estate Planning Needs? 

Your assets are more than just numbers on a balance sheet; they’re the legacy you’ll leave for your loved ones and the causes you hold dear. 

Through our Four-Pillar Retirement Plan™ approach, we scrutinize your wills, trusts, Powers of Attorney, and beneficiary designations. We also collaborate closely with your legal advisors to seamlessly integrate the financial and legal elements of your estate. In doing so, we aim to ensure a lasting, meaningful impact for future generations.

It starts by creating your baseline Retirement Plan Tracker (RPT), customized to you based on your income, expenses, retirement plans, and critical goals. This typically takes two or three sessions to complete. 

After we have completed the RPT, we will meet once or twice more to fine-tune and optimize your retirement plan by assessing the 4-Core Pillars and implementing critical income, tax, investment, and legacy strategies. 

We will meet with you regularly to review your plan to ensure it is updated based on your financial situation. 

To learn more about our estate planning services, connect with us

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