Estate Planning: Blended and Traditional Families and Same-Sex Couples

same-sex family,  Illinois Estate Planning Lawyer, blended and traditional familiesA recent survey compiled by UBS highlights the differences in the American family structure of today compared to past generations, and how those differences may affect a family's estate planning.

According to the survey, 34 percent of all high-net-worth investors live in modern families and 35 percent live in traditional families. However, nearly two-thirds of those who participated in the survey felt that financial advice is targeted to only traditional families.

The survey classified a modern family as one consisting of same-sex couples, one in which children were living in the home from prior relationships, or a home with parents and adult children living together.

There were 2,715 high-net-worth and affluent investors who participated in the survey. Of those who participated, 1,787 had a minimum of $1 million in investable assets, with slightly more than 400 members of that group having at least $5 million in investable assets.

Fourteen percent of survey participants lived in blended families. More than half of those families noted that their lives are more complicated than those in traditional families, with issues surrounding finances and retirement planning.

Members of blended families cited additional issues—more than 40 percent expressed that they did not accurately anticipate the financial costs of supporting their spouses' children. Sixty percent indicated that those children had not fully accepted them, despite the fact they were helping to support them. These issues parlayed into difficulties when trying to decide asset division upon a person’s death—almost 70 percent surveyed said they had not been able to decide how asset division would be handled, compared to only half of those traditional family members who were surveyed.

Same-sex couples who participated in the survey pointed to the recent Supreme Court decision which legalizes same-sex marriage as a positive move towards estate planning for same-sex couples. However, more than half those surveyed also stated that there was a lack of financial planning information for same-sex families. Additionally, more than 70 percent said they are pursing financial advice on how the new law will impact retirement and health benefits.

The third type of family surveyed—those with adult children and aging parents—also expressed different financial concerns than those experienced by traditional families. Many of these aging parents—53 percent—are concerned that they will not be able to reach and maintain financial security without the extra financial support of their adult children, especially when it concerns health care benefits.

If you have questions or concerns about future estate planning needs, please speak an experienced DuPage County estate planning attorney. Call Stock, Carlson, Flynn & McGrath, LLC today at 630-665-2500.


Tips for Planning a Well-Deserved Retirement

retirement planningData derived from the U.S. Census Bureau and recently reported by the Population Reference Bureau, as of mid-2014, shows that the baby boomer generation stands at 76.4 million strong.

For those born between 1946 through 1961, many are now reaching traditional retirement age and although hesitant to fully retire are still expected to have a significant effect on Social Security, Medicare and Medicaid as retirement is being redefined.

The American Association of Retired People (AARP) estimates that 79 percent of all baby boomers plan on incorporating some form of employment into their retirement plans. At the golden age of 65, many boomers are simply deciding to continue working full-time while others are opting to work part-time or change career objectives. For those choosing traditional retirement, opportunities for volunteering or participating in community service are popular.

Recently, a U.S. News & World Report article addressed this growing quandary as many Boomers are coming face to face with their planned retirement date and are hesitant to quit their careers and opt to continue to grow their retirement funds.

It is also advisable for those caught in this Catch 22 to have already began the estate planning process as well as considering these helpful tips regarding retirement while still in the final stages of gainful employment.

Estate Planning 101

Schedule a consult with an experienced estate plan attorney to discuss either devising a Trust or Will, designate a reliable and trusted Power of Attorney, establish a Living Will, and explore Estate Tax Planning as an option to "gift" to reduce final estate taxes.

Stash the Cash

Although most Boomers believe that their income does not match their retirement planning needs, it is highly advisable to revisit your strategy and contribute the maximum amount to your retirement accounts. Consider increasing the amount of your paycheck contribution deductions significantly during the time leading up to your planned retirement date. Opting to stash some cash in a Roth IRA, taxes can be paid while employed and you can enjoy tax-free withdrawals during retirement.

Take Your Retirement Budget for a Trial Run

While still employed, take your retirement budget for a test drive by abiding by your monthly projected retirement budget. By doing so, you will be able to discover if your budget is successful when put to the test. If not, there is still adequate time to prepare while still employed and changing your projected retirement date.

Bring Your Financial Picture into Focus

The best advice is to simplify. By consolidating your financial accounts and perhaps by consolidating your investment portfolio you are decreasing your risk of financial mistakes and lowering time spent on managing more than one account. Just as you will need to meet with an experienced estate planning attorney, schedule a consult with your trusted financial advisor to discuss any tax related consequences.

It is suggested that these strategies should be set into motion at least up to one year prior to your targeted retirement date, so you can ease into the next stage of your life with confidence and financial security.

If you are planning to retire within the near future and have yet to meet with a qualified Wheaton estate planning attorney, the legal team of Stock, Carlson, Flynn & McGrath, LLC offers strategic estate planning tools to simplify your total retirement plan. Contact our offices today to schedule your initial consultation.

Mapping Out Your Financial Future

estate plan, your financial future, Wheaton estate planning attorneysEstate planning and retirement planning tend to go hand in hand. Having a solid financial plan in place for your retirement also enables you to form certain elements of your estate plan, such as special needs trusts and living wills.

Financial advisors note key milestones that every person should be aware of when it comes to retirement planning. At each milestone, it is suggested that you take stock in what you have in place regarding your retirement funds and analyze any steps you need to take to remain on target.

Estate Planning Milestones

50 years old: When you reach this milestone, you are allowed to make what is referred to as "catch-up contributions" to both your individual retirement account as well as to your 401(k) account. Last year, the catch-up contribution for retirement accounts was $1,000, and for 401(k)s it was $5,500.

55 years old: Once you turn 55, you are allowed to begin taking early withdrawals from your 401(k), penalty-free. However, there are strict rules associated with these withdrawals—the accounts must be employer-established (not IRAs) and you must have worked for the employer up until you turned 55 years old.

59 and one-half years old: At the half-way point of your last year before hitting 60, you are allowed to take penalty-free withdrawals from both IRAs and 401(k) accounts. For those still working at this age, your plan administrator will be able to provide requirements on what is referred to as "in-service" withdrawals.

62 years old: This is the earliest age you can retire and collect Social Security benefits. However, keep in mind that the earlier you retire, the less your benefit will be. At 62, your benefit will be approximately 30 percent less than if you retire at this age.

65 years old: You can sign up for Medicare once you turn 65 years old. Also, if you have been contributing money to a health care savings account, you are now allowed to take money out for non-medical reasons without having to pay a penalty.

Between the ages of 66 and 67 years old: If you were born between 1943 and 1959, turning 66 means you have reached retirement age and can collect Social Security. For those born in 1960 or after, you reach your Social Security retirement at age 67.

70 years old: If you wait to retire until your 70th birthday, you will receive your full Social Security benefit.

Contact an Estate Planning Attorney

It is never too early to start planning your financial future for retirement. Contact the experienced Wheaton estate planning attorneys of Stock, Carlson, Flynn & McGrath, LLC at 630-665-2500 to schedule your consultation.