When planning for retirement, baby boomers should consider two scenarios: what happens to their estate when they die, and what might happen to the estate should they live but aren’t able to live on their own.
An article on foxbusiness.com offers some questions and answers for boomers trying to figure this out.
1) How do I avoid some common long-term care mistakes?
- Don’t tie up your money in long-term investments.
- If you buy long-term care insurance, make sure the benefits are adequate.
- Have proper advance directives in place, such as power of attorney and health care proxies.
- Be careful of reverse mortgages.
- Take advantage of penalty-free transfers of assets when applying for government benefits.
- Don’t stay in investments too long just because you don’t want to pay capital gains taxes.
2) How do I avoid common estate planning mistakes?
- Make sure to plan for liabilities and expenses that can be foreseen, such as long-term care.
- Always update beneficiary designations on bank accounts and insurance policies.
- Take steps to avoid conflicts among heirs. A trust or will that makes your intentions clear is helpful.
- Don’t try to make your will by downloading software online.
- Don’t transfer real estate while alive unless done through trusts or you could pay high capital gains taxes.
If you have questions about estate planning, feel free to call us for a consultation at (626) 696-3145.
