Paul O. Dillon, Attorney at Law

Pay Raise can Have an Impact on Retirement Savings

Getting a raise is always good news, but if you are a Highly Compensated Employee (HCE), it could negatively impact your ability to save for retirement through your 401(k). There are some steps you can take, says the recent article “That raise you got might complicate saving for retirement, but advisors have workarounds” from CNBC.

The 2021 and 2020 limits for deductible contributions to a 401(k) plan are $19,500, or $26,000, if you are over 60 and eligible for a $6,500 catch-up option. If you qualify as an HCE, how much you may contribute to your 401(k), depends on the participation rates of other employees in the company. You are not allowed to contribute more than 2% above the average contributions of other employees in the plan.

Here is how it works. If the average employee contribution to a 401(k) plan is 5% of their salary, the HCE may not contribute more than 7% to their account. Someone earning $150,000 would be limited to a maximum of $10,500 to the plan. The rule was created to encourage wider participation in the retirement plan. There are also rules about the employer’s contributions to the plan to maintain its tax-qualification status.

For HCEs, this presents a problem. It is a good problem, but still a problem. Many tax analysts expect tax rates for HCEs to rise in the near future, so simply deferring taxes now might not be the entire solution.

Every dollar added to a qualified plan today saves about 37 cents in taxes. However, if the withdrawals are taxed at 42-45%, the tax-free growth advantage is minimized or lost entirely. What can you do?

• Contribute what you can to qualified plans, especially if your employer has a matching plan.
• If you are over 50, use the $6,500 catch-up contribution regardless of any limits on regular contributions.
• Use a traditional IRA or Roth IRA, if you are eligible to save $6,000 a year or $7,000 if you are over 50.

The Roth IRA is funded with after-tax dollars but grows tax-free and withdrawals are not taxed, a major reason for their appeal. However, most HCEs do not qualify for Roth IRAs, since the contribution limits phase out when a single taxpayer’s income tops $125,000 and are eliminated entirely at $140,000.

Another strategy is to use a non-deductible IRA that can eventually be rolled into a backdoor IRA. The account is funded with after-tax dollars, and the earnings are also taxable. However, account holders are allowed to roll the funds into a Roth IRA tax-free and with no penalty until 2025, regardless of their income level. The contribution limits are the same as with a traditional IRA.

Reference: CNBC (March 9, 2021) “That raise you got might complicate saving for retirement, but advisors have workarounds”

Divorce, Death and Details: Missteps can Create Estate Planning Disasters

This estate battle shows how small details can become huge headaches. Four courts and several years after this estate battle began, a family won a case that could have been easily prevented, as reported in The Dallas Morning News article “The way out of the ERISA trap: A tale of divorce, death and money.”

A couple married and then divorced. The divorce decree clearly stated that Mike was awarded all of his employee benefits, including his life insurance. However, when Mike logged into his employer’s benefits systems, it would not allow him to delete his ex-wife as the beneficiary of his life insurance. It may have been programmed that way. There are laws concerning removing spouses from employee benefits. Or it was a glitch. However, Mike did not pursue it.

When Mike died, he was survived by his parents, who claimed his estate, but the $377,000 life insurance policy was not part of his estate because his ex-wife was still the beneficiary.

His parents filed a claim with the insurance company for the proceeds of the insurance policy.

The first court they filed in was the probate court, so they could be properly recognized as Mike’s heirs. The probate court found in their favor and named Mike’s dad as the independent administrator of his estate.

The second court was federal court. That’s because employee benefits are governed by a federal law ERISA—the Employee Retirement Income Security Act—that controls employee benefits, including employer-provided life insurance. These matters can only be dealt with by a federal court.

The federal court ruled that because Mike’s ex was on the beneficiary form, she was the rightful owner.

However, Wendy had waived her rights to the insurance benefits when she signed off on the divorce decree. Mike’s parents were determined to win this battle.

Their legal team took the argument next to court three—the original divorce court. Mike’s dad, in the position of the estate administrator, argued that while Wendy did have a right to receive the money under ERISA, she did not have a right under state law to keep it. She had waived that right in the divorce decree. The divorce court agreed and found that Mike’s estate owned the proceeds. The money was to be turned over to Mike’s parents.

Court number four came when Wendy petitioned the state appellate court to overturn the award. She lost.

What were the factors that allowed Mike’s parents to win this case? The divorce decree contained clear language regarding the life insurance policy. If it had been poorly drafted, the results could have been different. Mike’s parents went through all the correct procedural courts—establishing heirship, then probate, then divorce enforcement case.

One step could have been added: a restraining order so that the ex could not squander the money between the time that she received the proceeds and when the final judgement was rendered.

Reference: The Dallas Morning News (Jan. 24, 2021) “The way out of the ERISA trap: A tale of divorce, death and money”

Are Retirement Accounts Divided in a Divorce?

Divorce is different for older couples. They must focus on retirement accounts instead of college savings plans, explains a recent article from Kiplinger titled “Considering Divorce? Beware of Retirement Account Breakups.” After retirement accounts, the marital home is usually the second largest asset.

Older couples with separate retirement accounts often combine the balances to divide them, along with any other savings accumulated during the couple’s lifetime. However, IRAs, 401(k)s and pensions are complicated financial tools and there are equally complex rules as to how the accounts are divided. Transferring retirement funds to a former spouse can have large tax consequences, if they are not done correctly.

Couples should have their matrimonial attorneys work with an estate planning attorney to protect their retirement funds from any mishaps. A qualified domestic relations order, or QDRO, is needed to transfer a 401(k) or pension rights in a divorce. The QDRO is issued by a court or state agency and recognizes the divorcing spouse’s right to receive all or part of a portion of the account owner’s defined contribution plan or pension.

Dividing assets with a QDRO occurs in two different ways. One awards a separate interest in the account balance, and the second permits the divorcing spouse to share in the payment of benefits. Once an agreement is reached, the account owner gives the document to the plan administrator. Drafting a QDRO can be costly, so it is recommended that the plan administrator be asked to provide model QDRO language to ensure that the document aligns with that particular plan’s requirements.

A 401(k) is easier to divide. Once the couple has negotiated who is getting what, the monies can be transferred to the other spouse’s IRA, with no federal income taxes or penalties. However, if the spouse receiving the money takes the money directly and it does not go by direct transfer, then income taxes will be owed. There won’t be a 10% penalty for early distribution, as long as the QDRO is correctly prepared. Once the money is transferred from one spouse to another’s IRA, then early withdrawals will require the payment of income taxes and a 10% penalty.

Pensions are more complicated. Each employer plan has different rules for dividing up a pension, and an actuary is needed to determine present value of future benefits to ensure a fair distribution. It’s easier to split a pension when the pensioner spouse has already begun taking benefits. In that case, the QDRO can be used to divide payments by a dollar or percentage amount.

There is no need for a QDRO for dividing an IRA. The terms for the division of the accounts must be specified in the divorce or separation agreement, which the account owner must provide to the IRA sponsor. If the money is to be divided with no taxes or penalties, the agreement must specify that a percentage or dollar amount of the account owner’s balance goes to the spouse’s IRA in a direct trustee-to-trustee transfer. The language matters to avoid taxes and penalties.

If the receiving spouse decides to take cash out in the transfer, they will still owe taxes on the withdrawal. If they are younger than 59 ½, they’ll also owe a 10% penalty. In the same way, the account owner who takes money from the IRA to give to a spouse in a divorce will have to pay taxes on the payout and the 10% penalty, if they are under age 59 ½.

Reference: Kiplinger (Jan. 4, 2021) “Considering Divorce? Beware of Retirement Account Breakups”

The Biggest Estate Planning Mistakes and How to Avoid Them

Heirs who are prepared to inherit wealth, with families who talk about wealth and have an estate plan, will do better than those who do not, says the West Haven Observer’s recent article “5 Estate planning disasters you’ll want to avoid.” A constantly changing legal and tax environment presents significant challenges, but a few simple steps may save your beneficiaries from the expense and stress of these common estate planning mistakes.

1. Not designating beneficiaries properly. This is one of the most common mistakes, and one that cannot always be fixed. It’s easy to forget whose name you put on a pension or life insurance plan thirty years ago. However, failing to check those beneficiaries, especially if your life has undergone big changes, can lead to the wrong people enjoying the proceeds.

Using beneficiary designations is an excellent way to bypass the process of probate, since assets that pass this way are not subject to probate. Depending upon where you live, probate can be a long, drawn out process. A beneficiary designation is far simpler and more efficient.

Failing to name a beneficiary when setting up bank accounts, opening CDs, and savings accounts is a common error. This can be fixed by making these accounts “TOD,” or Transfer on Death, and the account goes directly to your beneficiary.

Your will does not control any beneficiary designations. That’s why this step is so important.

2-Designating a minor as a beneficiary. You love your grandchildren, but unless they are adults, they cannot inherit assets until they are 18 or 21, depending on the laws of your state. If a minor does receive an asset, the court appoints a guardian to supervise and manage the assets. Your estate planning attorney will advise you on your individual situation, but one alternative is to list a guardian for the minor child inside the will, so the court appoints the person who you choose to manage the property until the child becomes of age.

Another means of providing for young children or grandchildren is to create a trust. The trust names a trustee who is usually a trusted friend or relative who is knowledgeable and responsible. They manage the assets on behalf of the child. The trust also permits assets to pass without probate.

3-Failing to fund a trust. All too often, this is the weak link that breaks the estate. Placing assets within the trust is called funding. Usually this means changing the ownership of bank accounts or real estate from being owned by an individual to being owned by the trust. If the trust is not funded and the will has instructions that seemingly contradict the trust, the asset will need to go through probate and the trust instructions will be ignored.

4-Leaving a tax nightmare for heirs. One of the many advantages of passing on real estate or other assets that appreciate that beneficiaries get a “step up” in basis. That means the heirs are not responsible for any income taxes on the appreciated assets. This can be a very big benefit. There are exceptions—inherited IRAs and 401(k)s don’t have this advantage. However, the recent passage of the SECURE Act has taken away many tax benefits for IRA heirs. Most non-spouse beneficiaries must fully withdraw the entire amount from the IRA or 401(k) within ten years, and the withdrawal is considered ordinary income. It could leave your heirs with a huge, unexpected tax bill.

There is a workaround. By converting some or perhaps all of your retirement accounts to a Roth IRA during your lifetime, you can pay the taxes when converting the IRA to a Roth IRA at your current tax rate, which may be lower than your children or grandchildren’s rate. When you die, any money in the Roth IRA goes to heirs completely tax free.

5-The biggest mistake of all is not having an estate plan. Thinking about your legacy plan, mortality and incapacity is not fun for anyone. However, by spending the time and resources in creating an estate plan, you spare your loved ones from an inordinate amount of stress and expenses, which they will appreciate. One of the best gifts you can give your loved ones is a well-thought out, properly created and executed estate plan.

Reference: West Haven Observer (Nov. 12, 2020) “5 Estate planning disasters you’ll want to avoid”

Can I Revoke a Power of Attorney?

The story takes an unpleasant twist, after Cindy’s stepsister Charlotte suggests that she be given power of attorney to help Cindy with her business matters. When Cindy agrees, Charlotte’s attorney creates a Statutory Durable Power of Attorney that names Charlotte as her agent. What happened next, according to the Glen Rose Reporter in the article “Guarding against the evil stepsister,” was a nightmare.

A few weeks later, Cindy’s brother Prince found that Charlotte had moved money from Cindy’s personal bank accounts into a completely different bank, setting up joint accounts in Cindy and Charlotte’s names and granting Charlotte right of survivorship (ROS). This made Charlotte the legal owner of the account at the time of Cindy’s passing. Charlotte had also contacted Cindy’s former employer and was attempting to wrest control of Cindy’s pension. It wasn’t clear whether she was attempting to obtain the entire amount in a lump sum, but she was attempting to gain control.

Cindy realized that Charlotte was not to be trusted. However, Charlotte had the power of attorney, and all of these actions were legal. Could the power of attorney that she had signed be revoked? The answer is yes, which is important to know.

There were two paths available to Cindy: she could immediately execute a revocation of the Statutory Durable Power of Attorney that had been used to give Charlotte authority, or have her attorney create a new power of attorney granting power of agency to another person. Either way, Charlotte would be stripped of the legal authority to act on Cindy’s behalf.

Cindy had a new POA created, naming her brother Prince as her agent. The new POA had to immediately be presented to all of the financial institutions she deals with. She contacted her former employer and gave them proper notice that Charlotte no longer had authority to represent her. The new joint accounts that Charlotte had opened were then closed and individual accounts in her name only were open, which also ended the ROS. She could have returned her accounts back to the old bank or stayed with the new bank where Charlotte had opened new accounts. Cindy decided to stay with the new bank.

Cindy had to anticipate another challenge—that Charlotte might attempt to have Cindy declared incompetent and have herself named as Cindy’s legal guardian. To protect herself, Cindy’s estate planning attorney drew up documents stating that in the event Cindy ever needed someone to be her guardian, she did not want Charlotte to be named. In addition, she named the person she would want to be her guardian, if that is necessary in the future. While a judge ultimately has final discretion, the courts generally prefer naming a guardian as requested by an individual.

Your estate planning attorney can revoke a power of attorney, if it becomes clear that the person you’ve named is not acting in your best interests. Having an estate plan in place in advance of any medical or mental challenges is always better, so that you are less vulnerable to anyone trying to take advantage of you during a difficult time.

Reference: Glen Rose Reporter (Sep. 10, 2020) “Guarding against the evil stepsister”

Using Retirement Funds in a Financial Crisis

For generations, the tax code has been a public policy tool, used to encourage people to save for retirement and what used to be called “old age.” However, the coronavirus pandemic has created financial emergencies for so many households that lawmakers have responded by making it easier to tap these accounts. The article “Should You Tap Retirement Funds in a Crisis? Increasingly, People Say Yes” from The Wall Street Journal asks if this is really a good idea.

This shift in thinking actually coincides with trends that began to emerge before the last recession. People were living and working longer. Unemployment and career changes later in life were becoming more commonplace, and fewer and fewer people devoted four decades to working for a single employer, before retiring with an employer-funded pension.

For those who have been affected by the economic downturns of the coronavirus, withdrawals up to $100,000 from retirement savings accounts are now allowed, with no early-withdrawal penalty. That includes IRAs (Individual Retirement Accounts) or employment-linked 401(k) plans. In addition, $100,000 may be borrowed from 401(k) plans.

Americans are not alone in this. Australia and Malaysia are also allowing citizens to take money from retirement accounts.

Lawmakers are hoping that putting money into pockets now may help households prevent foreclosures, evictions and bankruptcies, with less of an impact on government spending. With trillions in retirement accounts in the U.S., these accounts are where legislators frequently look when resources are threatened.

However, there’s a tradeoff. If you take out money from accounts that have lost value because of the market’s volatility, those losses are not likely to be recouped. And if money is taken out and not replaced when the world returns to work, there will be less money during retirement. Not only will you miss out on the money you took out, but on the return, it might have made through years of tax-advantaged investments.

The danger is that if retirement accounts are widely seen as accessible and necessary now, a return to saving for retirement or the possibility of putting money back into these accounts when the economy returns to normal may not happen.

IRA and 401(k) accounts began to supplant pensions in the 1970s as a way to encourage people to save for retirement, by deferring income tax on money that was saved. By the end of 2019, IRAs and 401(k) types of accounts held about $20 trillion in the US.

Boston College’s Center for Retirement Research has estimated that even before the coronavirus, early withdrawals were reducing retirement accounts by a quarter over 30 years, taking into account the lost returns on savings that were no longer in the accounts. For many people, taking retirement funds now may be their only choice, but the risk to their financial future and retirement is very real.

Reference: The Wall Street Journal (June 4, 2020) “Should You Tap Retirement Funds in a Crisis? Increasingly, People Say Yes”

Do Unmarried Couples Need Estate Planning?

A couple that has no intention of ever getting married should know that they won’t get the automatic rights and protections that legally wed spouses get, particularly when it comes to death. Therefore, unmarried couples must make a concerted effort to cover all the bases, says CNBC’s recent article entitled “Here’s what happens to your partner if you’re not married and you die.”

The number of unmarried couples who live together reached 18 million in 2016, a 29% increase from 14 million in 2007, according to the Pew Research Center. Among adults age 50 and older, the increase was 75% with roughly 4 million cohabiting in 2016, compared to 2.3 million in 2007.

These couples still face some key differences from their married counterparts. For example, there’s no filing federal taxes as a couple, and if an employer allows health insurance for a partner, the amount the company contributes is taxable to the employee, rather than being tax-free for a spouse.

End-of-life considerations also need attention. Unmarried couples can sign some legal documents that will dictate what happens, if one of them either becomes incapacitated or passes away, which is a type of estate plan.

If you die without a will or intestate, the state probate court will decide how your assets are distributed. A will by itself also won’t address everything. If you want to make sure your tax-advantaged retirement accounts — like your Roth IRA and 401(k) plans — go to your partner, make sure that individual is the designated beneficiary on those accounts. Even if your will says otherwise, whoever’s listed as the beneficiaries on those accounts will get the money. It’s the same for insurance policies and annuities.

If both partner’s names are on checking, savings or investment accounts, the account will pass directly to the surviving partner. However, for an account with only one partner’s name on it, ask the bank about the appropriate form to be completed, so the money is left directly to the surviving partner. This is what’s called a transfer-on-death or payable-on-death designation. Without this designation, the assets will end up in probate and distributed either in accordance with the will or intestacy state laws.

Regardless of how the mortgage is paid or whose name is on the loan, the person named on the deed is the owner. If the house in one partner’s name, it won’t automatically pass to the partner, as it would with a married couple (via joint tenancy with rights of survivorship). It would become part of the probate estate. To remedy this, you can retitle the home, so that both partners are listed as joint owners on the deed, “with rights of survivorship.” Each partner then equally owns the house and is entitled to assume full ownership upon the death of the other. Note that there could be other factors to consider before adding a partner’s name to an existing deed, such as expenses, tax implications and protection from potential creditors. Ask your estate planning or probate attorney before you make a change. A partner owning the house, could leave it to the surviving partner in the will. Remember, though, any asset passing via the will is subject to probate, which may lead to unforeseen issues.

In addition, a partner has no legal say in his or her partner’s medical treatment, if he or she is in a situation where they can’t make decisions for themselves. To give the partner that right, partners can grant each other a durable power of attorney over health care. This allows the partner to make important health-care decisions, if the one in the hospital is unable to do so. This is different from a living will, which states a person’s wishes if they are on life support or suffer from a terminal condition. This document helps guide the agent’s decision-making. If no one is named, medical personnel must follow the instructions in that document.

Likewise, partners may want to give each other durable power of attorney for finances. This would let them handle one another’s money, including accessing accounts as necessary, if the incapacitated partner could not do so.  If the partners have dependents, name a guardian for them in the will. Otherwise, that decision will be left to the courts.

Reference: CNBC (Dec. 16, 2019) “Here’s what happens to your partner if you’re not married and you die”

How Do I Avoid Unintentionally Disinheriting a Family Member?

When an account owner dies, their assets go directly to beneficiaries named on the account. This bypasses and overrides the will or trust. Therefore, you should use care in coordinating your overall estate plan. You don’t want the wrong person ending up with the financial benefits.

The News-Enterprise recent article, “Don’t accidentally leave your estate to the wrong person,” tells the story of the widower who remarried after the death of his first wife. Because he didn’t change his IRA beneficiary form, at his death, his second wife was left out. She received no money from the IRA, and the retirement money went to his first wife, the named beneficiary.

Many types of accounts have beneficiary forms, like U.S. savings bonds, bank accounts, certificates of deposit that can be made payable on death, investment accounts that are set-up as transfer on death, life insurance, annuities and retirement accounts.

Remember that beneficiary designations don’t carry over, when you roll your 401(k) to a new plan or IRA.

You can name as your beneficiaries individuals, trusts, charities, organizations, your estate, or no one at all. You can name groups, like “all my living grandchildren who survive me.” However, be certain that the beneficiary form lets you to pass assets “per stirpes,” meaning, equally among the branches of your family. For example, say you’re leaving your life insurance to your four children. One predeceases you. Without the “per stirpes” clause, the remaining three remaining children would divide the death proceeds. With the “per stirpes” clause, the deceased child’s share would pass to the late child’s children (your grandchildren).

Don’t leave assets to minors outright, because it creates the process of having a court appointed guardian care for the assets, until the age of 18 in most states. Instead, you might create trusts for the minor heirs, have the trust as the beneficiary of the assets, and then have the trust pay the money to heirs over time, after they have reached legal age or another milestone.

You should also not name disabled individuals as beneficiaries, because it can cause them to lose their government benefits. Instead, ask your attorney about creating a special needs or supplemental needs trust. This preserves their ability to continue to receive the government benefits.

Reference: The News-Enterprise (November 30, 2019) “Don’t accidentally leave your estate to the wrong person”

What Don’t I Know About Retirement?

Investopedia’s recent article, “6 Surprising Facts About Retirement,” writes that if you think most people are saving more in order to prepare for their long-term needs, you’d be incorrect. The article provides us with some of the more startling truths about retirement in the U.S.

1. Retirement May Be Longer Than You Think. The average American will retire at age 66 and live until about 79. However, many will see their retirement last much longer than 13 years. A 65-year-old woman has a 50% chance of making it to age 85, and a 65-year-old man has a 50% chance of reaching age 82. This is why younger people need to plan for 20 years or more of income in retirement. For current retirees, an ultra-conservative portfolio composed solely of bonds may not give them sufficient growth, especially with interest rates so low.
2. Social Security Doesn’t Do It By Itself. Many experts suggest replacing 80% of your usual income once you hit retirement. However, for many, Social Security payments alone won’t be nearly enough to hit that target. In 2019, the average monthly Social Security benefit is just $1,461. That’s just $17,532 per year.
3. We’re Waaaay Behind on Savings. Americans are quite far behind on saving for retirement. When the American workplace turned away from pension plans, workers needed to be responsible for securing their retirement funds. We’re not doing it: according to thestreet.com, in 2019 a typical couple in the 56-to-61 age bracket without any retirement accounts had just $17,000 in savings. For many, that’s not enough to live off for a year, let alone a whole retirement. However, the mean retirement savings of working households age 32 to 61 is $95,776, according to the Economic Policy Institute. 35% of workers have $100,000 or more saved for retirement.
4. Just Half of Americans Have a Retirement Plan. Today, the median annual pension amount for the fast dwindling number of Americans who have the old-fashioned defined-benefit plan is less than $10,000, according to CNBC.com. However, many of us aren’t replacing those pensions with a contribution plan, like a 401(k). Almost half of the population (43%) has no workplace savings vehicle of any kind in 2019, according to Bloomberg.
5. Many People are Staying in the Workforce. Because so many Americans are behind in their savings, it may not be surprising that many remain in the workforce well after reaching Social Security eligibility. Almost 19% of people 65 or older were working either full- or part-time, as of 2017. Consider this: about 20% of workers overall say they’ll never be able to retire!
6. Medicare Doesn’t pay for Assisted Living. Nearly 70% of individuals who reach age 65 will require long-term care at some point. What many seniors don’t know, is that Medicare doesn’t pay for most long-term care costs. It only covers 100 days of care at a skilled nursing facility, and only if it was preceded by a hospital stay of three days or more.

Begin your analysis, by looking at the amount of money you’ll need for retirement, based on your current spending and the standard of living you want. Then look at your savings balances and how much you’re saving regularly.

Roughly 55% of Americans build their nest eggs with a regular savings account. However, that might not be good enough, because of the low interest rates. Savers should consider other investment vehicles.

Be sure that you’re maxing out contributions to your 401(k) or 403(b) if you have one, or at least, saving enough to get the company match. If you don’t have a plan through your work, or you’re lucky enough to max out your plan each year, you can supplement your savings with an IRA. For 2019, you can contribute up to $6,000 a year to an IRA, or $7,000 if you’re age 50 or older.

Reference: Investopedia (September 27, 2019) “6 Surprising Facts About Retirement”

What Do I Need in My Estate Plan in Addition to a Will?

American Legion’s recent article, “Planning beyond the will” says that it’s important that your estate planning papers are synced with your wishes and the current law, but you should also look at some items outside of the fundamental documents:

Beneficiary designations. This includes life insurance policies, IRAs, current and former employer retirement plans and annuities. A beneficiary designation supersedes any instructions in a will or trust. As a result, it’s important that your designations reflect your current wishes and are synched with the rest of your estate plan.

Property title. Be sure that you know how your property is titled. If the family home is titled as joint tenants with rights of survivorship, then it will pass seamlessly to the surviving owner. There are also potential income-tax implications. Ask your estate planning attorney about this and the best way to address title concerns.

Personal property plans. This could be as simple as giving your trustee or executor the authority to make decisions, designating instructions with respect to specific property in your will or trust, or incorporating a personal property memo into your plan. The guidance you give can alleviate major problems, when you’re no longer around to settle disputes.

A continuity book. In the military, it’s common that just as you’re getting used to your responsibilities, it’s time to PCS (Permanent Change of Station) or switch jobs. Many leaders require a continuity book that helps bridge that knowledge gap, so your successor has an idea of what to do. You can adopt this practice in your personal affairs. This can include an inventory of your assets, liabilities and insurance policies. This “continuity book” should also include your social media account passwords, key contacts, funeral wishes and the location of your key estate planning documents. This is an important resource for trustees and executors, as they assume their duties.

Enjoy the holidays, and this year, work on making sure that your family spends many more happy holidays together.

Reference: American Legion (October 18, 2019) “Planning beyond the will”