Estate planning helps wishes come true

By Adam Carlat, Special to Independent Newsmedia

The X-factor in retirement planning is that you don’t know how long you will live. It is a challenge not only in budgeting for your remaining years, but also in making sure that your estate will go where you want after you die.

I’ve seen it take years for a client to receive an inheritance because the beneficiary information was not listed correctly and/or the person in charge didn’t know where all the assets were.

Making sure the greatest amount possible goes to your heirs, rather than taxes, court costs and attorneys’ fees, requires careful estate planning.

Look at your individual retirement accounts and make sure the people you want are listed as beneficiaries. That way, your bequests can go directly into their own or inherited IRAs, subject to mandatory distribution requirements for those who aren’t surviving spouses.

Many folks today have their “non-retirement” retirement funds – cash and holdings not in IRAs or similar accounts – in living trusts to shelter their estates from the costly and public probate process. If you have a trust and you are the primary trustee, make sure you have designated co- and/or secondary- trustees or an executor; they will carry out the provisions of the trust following your death, distributing of the assets as you have instructed.

It is also important to be aware of federal estate taxes and the current estate-tax exemption, which is the total amount you can bequeath before the tax begins to apply. The exemption has been a bit of a roller coaster in recent years because of congressional gridlock, but for 2017 it will be $5.49 million per individual and $10.98 million per married couple, according to the IRS. Any additional amount that you leave behind could be subject to a tax rate of 40 percent.

Finally, it’s important to document your holdings, both amount and location, so that the executor or trustee can account for your assets and distribute them to your heirs in a timely manner. In this age of identity theft, the desire to keep this data confidential is understandable. But identify at least one person you can trust, perhaps that designated executor or trustee, then give that individual an outline of your assets and tell him or her where they can find the details when the time comes.

Identity theft also hangs over the decision about were to keep those details. A full accounting will help expedite matters following your death, but a personal database, complete with account numbers and passwords, could be a one-stop shop for thieves. There are a few options, none of them foolproof:

•    Place hard copies of the information in a binder that you keep in a safe place.
•    Create a spreadsheet on your computer. Make it password-protected and back it up to an external hard drive. But as with the hard copies, there remains a danger that the data could fall into the wrong hands.
•    Store the information on a compact disc or flash drive in a safe-deposit box. Again, tell somebody where to find the key. This may be safer, but it makes updating the data cumbersome – retrieve from bank, update, return to bank.
•    Upload your data to the cloud. Like many financial advisers, I offer this resource to my clients. While this is a password-protected and security-monitored system, some individuals will remain concerned about information security.

It really doesn’t matter which options you choose. What’s important is that you consider these issues now to help expedite your wishes when you’re gone.

Editor’s note: Mr. Carlat is a Glendale-based financial adviser and Chartered Retirement Planning Counselor® with One2One Wealth Strategies. Questions? Call 623-850-0016 or email

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