When you look around your holiday table this year, you will probably not be thinking about the beneficiary designations on your 401(k), IRAs or life insurance policies.  But perhaps you should.

Having the wrong beneficiary designated on these and other things like bank accounts, annuities and 529 college savings plans is probably one of the biggest estate planning goofs people make.  This is because most of us name those beneficiaries when we initiate a plan or open an account and then forget about them. 

However, life changes and this is why you need to review and update your beneficiary designations at least once a year.  For example, here are six scenarios that could cause a change in beneficiary designation:

●     You got married, divorced or remarried

●     You changed jobs and moved your retirement account

●     One of your beneficiaries died

●     The birth of a child or grandchild

●     You moved your account to another financial institution

●     One of your beneficiaries became disabled

Not having the correct beneficiary designated (or designating a minor) can wreak havoc on your family when something happens to you as well as create tax issues for your heirs.  You could unintentionally disinherit the very people you care the most about and potentially tie up your estate in probate or, worse, litigation.

Enjoy your holiday with family, and after the holidays are over, make it a point to review your beneficiary designations and update, if necessary. 

If you don’t already have an estate plan – or have one that needs to be reviewed and updated – make 2014 the year you get this done.  We normally charge $750 for a Family Wealth Planning Session, but because this planning is so important, I’ve made space for the next two people who mention this article to have a complete planning session at no charge. Call today and mention this article.

A recent Wall Street Journal article noted that boomers and seniors are more interested in passing along family heirlooms and history, leaving a legacy for future generations that extends beyond money.

Citing a 2012 survey by Allianz Life Insurance that found 86% of boomers and 74% of Americans aged 72+ said keeping family history alive was the most important piece of their own legacies, the WSJ article also noted that family mementos and heirlooms are viewed by these groups as a key inheritance item. 

Unfortunately, family mementos are one of the most common causes of conflict among heirs.  Here are some tips for helping to keep your family out of conflict over the things you (and they) love:

1.  Talk to your family about who will get what when the time comes, and work out the details beforehand.  Then make sure all family members are aware of the choices you have made and why.

2.  Have a complete estate plan that includes a memorandum that explains the specific bequests or consider including that in a recorded audio you leave to your family so they not only hear your voice, but the stories behind the mementoes as well as your desire for who gets what and why. 

3.  Don’t play favorites, but do give thought to who you designate to receive what -- these are the things your family will most remember.

4.  To pass along family history and your values, consider creating an ethical will or Family Wealth Legacy Interview.  This can take any form – a letter, a book, a website – and is not legally binding, but instead helps you pass on the intangibles that make each family unique.

If you would like more information about passing on the things you love to the people you love, call our office today to schedule a time for us to sit down and talk. We normally charge $750 for a Family Wealth Planning Session, but because this planning is so important, I’ve made space for the next two people who mention this article to have a complete planning session at no charge. Call today and mention this article.

Everyone’s “to-do” lists seem to grow longer at this time of year, but yours is incomplete until you ask your Personal Family Lawyer to support you to get these six tax questions answered before the end of the year:

Should I defer or accelerate income?  If it looks like you’ll be in a higher tax bracket in 2014, ask if you should pull more income into this year.  Conversely, if you will be in a lower tax bracket next year, ask if you should defer income until January.  In addition, find out if you should accelerate deductions by paying any income or property taxes not due until 2014 this year.

Should I take any gains or losses this year?  If you are currently in a low tax bracket and have made gains on your investments this year, you may want to consider selling some investments to realize lower tax rates on those gains. 

Should I do a Roth conversion?  If you have a traditional IRA, you may want to convert all or some of the assets to a Roth IRA, especially if your retirement is years away.  While you will pay taxes on those assets now, your earnings will grow tax-free in a Roth IRA.

Should I make any changes to my FSA or HSA for 2014?  If you have a flexible spending account or health savings account through your employer and anticipate bigger medical expenses in the new year, you may want to increase those funds to allow yourself to use pretax money for out-of-pocket medical costs. 

Should I be making charitable contributions?  If you made more money this year, you may want to think about reducing your taxable income with charitable contributions.  Gifting appreciated securities will allow you to avoid the capital gains tax while still deducting the full amount of the donation.

Should I be making gifts to family?  In 2013, you can give up to $14,000 (or $28,000 if you are married and your spouse participates) to as many individuals as you want.  This allows you to assist family members while removing taxable assets from your estate.  It’s important that if you are going to be giving gifts, you call us because we can set it up so those gifts are protected from bankruptcy, divorce or other creditors forever.

If you would like more information about tax-saving strategies, call our office today to schedule a time for us to sit down and talk. We normally charge $750 for a Family Wealth Planning Session, but because this planning is so important, I’ve made space for the next two people who mention this article to have a complete planning session at no charge. Call today and mention this article.

If you have not revisited your estate plan this year following the changes made to the estate and gift tax laws by the American Taxpayer Relief Act of 2012 passed by Congress on Jan. 1, 2013, ask yourself these 10 questions then schedule a meeting with your Personal Family Lawyer:

1.  Should your estate plan be changed to reflect any new laws?  new assets? changes in your life?

2.  Are your assets being tracked so that if anything happens to you, your family knows exactly how to access everything you own right now?

3.  If you have a family LLC or limited partnership, has it been properly maintained to comply with tax laws?

4.  If you have made gifts to family or friends, have you exceeded your exemption limit for the year?

5.  Are you maximizing opportunities for income tax deductions in 2013?

6.  Are the people you have designated as executor, trustee or beneficiaries still the right ones?

7.  Are you employing the best strategies for year-end charitable gifting?

8.  If you donate cash to a charity from an IRA, are those being made properly?

9.  Is there an opportunity to use a trust to protect assets?

10.   What considerations should you be giving to managing capital gains and timing long-term losses?

If you would like more information about creating or updating your estate plan, call our office today to schedule a time for us to sit down and talk. We normally charge $750 for a Family Wealth Planning Session, but because this planning is so important, I’ve made space for the next two people who mention this article to have a complete planning session at no charge. Call today and mention this article.