One of the most overlooked aspects of a financial plan is how your ‘stuff’ will be transferred to your heirs. In some cases, beneficiary designations and a will may be all that’s needed to make sure your loved ones get your money and family heirlooms, but in other cases, it can be more complex than that.
Consider this scenario that’s fairly common. A husband was in his second marriage and his current wife was younger. He wanted to ensure that his estate could provide for his wife, but ultimately go to his children from his first marriage. When we reviewed the plan they currently had in place, he was surprised to learn that all the money went to his current wife outright. She would be under no legal obligation to leave any money to his children. Given the age difference, it was likely she would outlive him by at least a decade.
There are various ways his wishes could be accomplished, including a QTIP Trust – which is designed to provide for his spouse and then leave the assets to his children. Regardless of the complexity of your situation, it’s important not to bypass reviewing your estate plan to make sure your ‘stuff’ get passed along to the ones you want in a tax efficient manner.
