Retirement Planning Should Be Part of Your Estate Plan

naperville estateplanning lawyerRetirement planning is critical, and should ideally be started long in advance of your actual retirement date. By incorporating retirement planning into your overall estate plan, you can ensure that all your assets are properly handled and that necessary things like beneficiaries, transfer of ownership, and tax protection are in place for when you retire and also for when you pass away. For business owners, retirement planning is even more important.

Retirement accounts and pensions must be addressed properly and thoroughly during retirement planning. There is an art to protecting retirement assets while maximizing tax benefits and ensuring that surviving loved ones have what they need. Failure to protect retirement assets can result in unnecessary taxes and probate fees and place a preventable financial burden on loved ones.

Retirement Assets in Your Illinois Estate Plan

Many people hold the majority of their wealth in qualified retirement accounts, such as 401(k)s, pensions, and IRAs. These assets must be managed carefully in estate plans. If you are not prepared, retirement assets can end up in probate and incur avoidable taxes.

Here are some things to keep in mind when including retirement assets in your estate plan:

  • Name a primary and contingent beneficiary for each retirement account.
  • Consider using a trust as the beneficiary of your retirement account. This can provide tax advantages and help preserve assets for your beneficiaries.
  • Beneficiary designations and property titles should be reviewed regularly and updated as needed.
  • Identify the primary capital your will use for day-to-day expenses during retirement and the surplus capital you will save for wealth transfer. Make sure the surplus capital is managed effectively for long-term investment and tax purposes.
  • Make provisions for long-term care. This is important because the costs of long-term care can quickly eat away at savings and retirement assets.

Retirement Planning for Business Owners

If you have a business, retirement planning is essential. Businesses often have specific retirement plans, such as 401(k)s, profit-sharing plans, and defined benefit plans. Careful planning is needed to ensure that these assets are properly protected and that the business can continue to operate after the owner retires. Work with an estate planning lawyer who understands wealth management and business ownership matters, or one who will work with a wealth manager to ensure everything is planned and handled as efficiently as possible.

Call Us for Help Addressing Retirement Assets in Your Estate Plans

Retirement planning is a crucial aspect of the estate planning process. The Naperville estate planning lawyers at the Gierach Law Firm can help you set up an estate plan that meets your unique needs and ensures that your assets are protected. To schedule a free consultation, call us at 630-756-1160 or contact us online.


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Please note: These blogs have been created over a period of time and laws and information can change. For the most current information on a topic you are interested in please seek proper legal counsel.

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