What You Don't Know About Estate Planning Can Hurt You

A colleague was lamenting how slow and costly it was to sort out his parents' estate after they had both passed away. His father thought that by setting up a trust, everything would be easily distributed to his heirs. Unfortunately, he and his siblings found out the hard way there were plenty of loose ends that hadn’t been taken care of.  For example, his father had money in an investment account that wasn't included in the trust and didn't have named beneficiaries. As a result, considerable time and money was spent sending it through probate.

While it’s always a great idea to have your estate in order, talking with an advisor can help make sure all the boxes are checked, and nothing is overlooked. Oversights come at a high cost.

 

Laura Beck writes in Yahoo!Finance about her conversation with a retiree who didn't use an advisor, but now sees significant ways professional help could have greatly impacted his finances.

 

One area where the retiree realized he should have worked with an advisor was in saving for retirement. He thought he was being smart by putting money only in investments he understood, like the stock of the company he worked for. Now he realizes that his misunderstanding of risk led him to put too many eggs in one basket.

Another area he now wishes he'd had help in was timing when to take Social Security. He thought it was a no-brainer to start getting the benefit as soon as he was eligible at age 62. He made this decision, in part, because of his mistaken assumptions about his own predicted longevity. Now he sees it as a costly mistake.

But the biggest way he is now convinced an advisor could have helped him was in planning for unexpectedly big costs in retirement, such as healthcare and taxes. He thought Medicare would cover everything and that retirees didn't have to pay taxes. He told Beck that he made costly mistakes in all these areas—mistakes he could have avoided if he had sat down with an advisor.

All areas of retirement can be overwhelming and confusing. Reach out to our Participant Success Center to help make sure your journey from wealth accumulation to retirement to passing along your estate goes according to a carefully considered plan. Taking steps today to prepare and plan with a competent professional can help both you and your loved ones achieve the financial wellbeing you desire.