Estate Planning for Retirement

If you have retired or are close to retiring, you probably think that you have reached the point in your life where your hard work, savings, and wise investments have paid off and you are on “easy street.”  To some extent, you are, but retirement can bring along with it some speed bumps, red lights and road construction that make “easy street” fraught with issues you must deal with. No longer having to get up and go to work every day is the well-earned reward of your retirement, but there will be new family issues to face as a retiree.  

As a retiree, you may have grown children with their own children, one or both of your parents still alive but in diminished health, or even a spouse in diminished health.  Each of these situations has its own set of responsibilities that fall upon you.

Are you legally prepared to handle these responsibilities?  Probably not.

If you and your spouse don't have in place a properly drawn estate plan and one of you becomes legally incompetent, the other spouse is severely limited. You cannot make medical decisions, have access to the medical records and doctors, or handle financial matters without first having the probate court appoint you as the legal guardian and conservator of the incapacitated spouse.  This process, known as “Living Probate” is expensive and time-consuming and even when you ultimately are appointed as the legal guardian and conservator, you will likely have to continue going back to the probate court for further orders to allow you to meet the changing needs of your incapacitated spouse.

Everything described above for an incapacitated spouse is equally applicable to your incapacitated parent.  One of your responsibilities as a retiree with an elderly parent is to make sure your parent has the proper estate planning documents in place so that you do not experience “Living Probate” with a parent.

Besides Living Probate for an incapacitated spouse or parent, as a retiree, you have to make certain that your estate plan leaves your assets in the manner that is best for your spouse, your children, and grandchildren. Consider:

  • What if you have a child who is divorced or could get divorced?  
  • How do you make sure that the spouse of that child does not inherit the assets you intended to pass only to your child?  
  • How do you make sure that a grandchild who has a serious health issue is properly taken care of if the child’s parents (your children) cannot do so?  
  • How do you make sure that a child or grandchild with a drug, alcohol or gambling abuse problem does not squander the inheritance you leave that child?  

The answer to these questions and more is to have a properly drawn estate plan that can deal with all the issues your family could face in a manner consistent with your wishes.

For many retirees, one of their biggest assets is an IRA account. It would be nice to preserve your IRA's tax-deferred growth and protection from creditors for not only your spouse and youself, but also for your children, grandchildren and beyond. Just naming a child or grandchild as a beneficiary of your IRA will not necessarily accomplish that goal, because that child or grandchild could remove all of your IRA assets at your death and spend the money foolishly or even lose it in a divorce.

If you name a specially designed trust we call an “IRA Inheritance Trust™” as the beneficiary of your IRA, your IRA will continue to enjoy tax-deferred growth, will remain protected from creditors of your children and grandchildren (including a spouse) while providing a steady income stream for your children and grandchildren.  

To calculate the extraordinary effect of tax-deferred growth, please see our IRA Tax Calculator.

If you want to maintain your retirement years on “easy street,” then give us a call at (314) 966-7766 and we can show you how to plan for the speed bumps, red lights, and road construction along the way.