Managing Risk and Transition

Managing the Risks of Life

Are you prepared for the unexpected? The more experience you have, the more you understand that nothing is certain. Some people live long lives, others are taken too soon. Some people work every day, others become disabled. Some people pass on peacefully, while others require long term care.

No one knows our fate. While statistics tell us how many people will fall in each category, only life can show us the human impact when a breadwinner loses the ability to earn; or when a parent dies prematurely; or when a spouse requires long term care. Maybe you have already seen the contrast between those who planned ahead and those who didn’t. Some people had adequate insurance so that their families are able to live comfortably, educate children and retire as they had planned. Sometimes the family is forced to make difficult, unpleasant choices.

We work with our clients to present understandable, affordable options to help your family continue the plans you made regardless of what the future holds.

Creating Your Legacy

We believe our clients should carefully consider the final stages of their life as well as the impact they can have on future generations. It is important to express these wishes in legal form and lift this burden from survivors when they are under the greatest stress.

You should also consider how and to whom you will want your estate distributed. This could be to heirs (spouses, children, or non-relatives) or charities. The heirs might be mature individuals who can be trusted to manage money, or children whose inheritance would require safekeeping until they become old enough to make their own decisions. You should also consider to whom you wish to leave family heirlooms or items of special value. Families have been know to squabble in the absence of a directive! 

Now is also a good time to start planning for the estate and the income taxes. The Massachusetts estate tax exemption is far lower than the Federal government, but there will probably be income tax due on any assets held in IRA or 401(k) accounts. While gifting is now less important with the increased Federal limits for the estate tax exemption, it’s still a practical way to reduce your taxable estate and see how tentative heirs will handle money in the future!

Next, if you want the impact of your legacy to extend into the future, you are well advised to consult your attorney regarding a trust. Trusts can provide control after you’re gone, protect special needs beneficiaries, provide tax benefits and fulfill a broad range of needs.

Finally, financial and tax planning work best hand in hand with a well drafted will and trust. Since we are not attorneys and do not provide legal advice, we do refer our clients to several attorneys who practice in the areas of wills, trusts, estates and elder law.

Investment and financial planning services are offered by Nathan S. Zielonka through his affiliation with Avantax.