Are you facing the situation where you have to start taking required minimum distributions from your qualified accounts but you don’t need the income for retirement? If this is the case, congratulations to you. You planned and saved well. And now you are faced with a financially comfortable retirement. But as age 70 ½ comes closer, you know the Internal Revenue Service is going to require you to start taking distributions from your qualified accounts, whether you need the income or not. What to do?
Ok – I know you don’t want to think about this. Life is good. Maybe you’re in your 20s or 30s, healthy and feel that nothing could ever happen to you. Maybe you’re in your 40s or 50s and feel you’re too busy taking care of business and enjoying your family to spend time with an attorney to have documents drafted. Maybe you’re a little older and thinking about your retirement savings and not whether or not you want someone to pull the plug!
The estate of most individuals is worth more than just money. A family business, a summer cabin on the lake or an antique car collection may be part of a legacy, rich with family history that you want to pass to your children and grandchildren.
The challenge is to develop a plan that meets your desire to pass along specific assets to certain individuals, while making sure each family member is treated fairly and equitably. Unfortunately, these assets may not be easily dividable, may have fluctuating values and lack liquidity, as well as potential tax liabilities.
The first step in deciding how the estate is to be distributed is to determine the estate value. This takes careful planning and open discussion with advisors. Make sure to include your accountant, lawyer, real estate advisor, business valuation expert and possibly an expert in collectibles valuation. Each asset should be carefully considered with respect to its value (monetary as well as emotional) and then start to develop your plan.