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Home » Resources » Frequently asked questions » Financial Planning FAQs

Financial Planning FAQs

    • Why should I include financial assistance planning in my estate plan?

    • Financial planning focuses on acquiring assets and building up your estate. A comprehensive estate plan will include numerous goals, including things such as ensuring that your assets are available to provide for loved ones when you are gone and making sure your wishes are honored at the end of your life.  At some point, the goals of your financial plan with become entwined with the goals of your estate plan. For example, your financial plan will likely include retirement accounts. Those accounts could impact your eligibility for Medicaid if you need long-term care at some point. To ensure that everything works together well it is imperative that you incorporate financial planning into your estate plan.

    • Do I need to include asset protection planning in my estate plan

    • Yes. Asset Protection planning should be part of any well thought out estate plan. Creating a financial plan that helps you amass a respectable estate and an estate plan that ensures your estate assets will be distributed accordingly to your wishes when you are gone only takes care of two-thirds of the bigger plan. You also need to protect the assets you acquire so that you will still have some left to pass down to loved ones after you are gone.

    • How do estate taxes impact my estate plan?

    • The federal gift and estate tax is effectively a tax on the transfer of wealth. A gross estate includes anything a decedent owned at the time of death that has value.  Without any deductions or adjustments to your estate, it could lose 40 percent of its value to federal gift and estate taxes. Both your financial planning and estate planning goals should consider the impact taxes will have throughout your life and at the time of your death.

    • What is an IRA?

    • An IRA is a tax–advantaged retirement account that you own and control. Earnings generated can compound on a tax–deferred basis until withdrawal. In essence, an IRA is like having your own personal pension that you and/or your employer may contribute to for your retirement years.  There are numerous different types of IRAs, the most common of which include a traditional IRA and a Roth IRA. Because each has different rules regarding taxation and withdrawals it is important to understand those rules before establishing an IRA.

    • What happens to your retirement accounts when you die?

    • When a participant in a retirement plan dies, benefits the participant would have been entitled to are usually paid to the participant’s designated beneficiary in a form provided by the terms of the plan (lump-sum distribution or an annuity). Many retirement plans require the account owner to name a spouse as the beneficiary unless he/she signs a form allowing the owner to name someone else as the beneficiary. The Employee Retirement Income Security Act (ERISA) protects surviving spouses of deceased participants who had earned a vested pension benefit before their death. The nature of the protection depends on the type of plan and whether the participant dies before or after payment of the pension benefit is scheduled to begin, otherwise known as the annuity starting date.  It is also important to remember that because they are non-probate assets, the assets held in a retirement account can be paid out to the beneficiary shortly after the owner’s death.

    • How does long-term care factor into my financial planning?

    • One of the most common mistakes people make is to under-estimate, or overlook entirely, the potential impact long-term care costs will have on their finances. With an average annual cost of over $100,000 for 2020, and an average length of stay of three years, a LTC bill can quickly deplete a retirement nest egg given the fact that Medicare will not pay for LTC. Medicaid will cover LTC costs, but you must first qualify, a process that could put your assets at risk if you failed to plan ahead.

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If you have additional question, contact the experienced estate planning attorneys at Collins Law Group by calling (310) 677-9787 to schedule an appointment.

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Testimonials

Client Review
August 19, 2020
    

“My mother told me about the Collins Law Group and I must say, the entire experience has been a real pleasure. Although I was nervous at first, the Collins Law Group staff put me at ease with their friendliness and knowledge. I didn’t realize how hard it could be on your family and loved ones left behind if you die without any planning or directions in place for them. My biggest concern was making sure my elderly mother would be provided for and taken care of if something happened to me. I have been a caregiver for her for 12 years, so this planning was crucially important. I had previously made a living trust for myself on Legal Zoom but there is no comparison to the level of service and professionalism that Collins Law Group embodies. Attorney Collins and her staff provides excellent service and it will take a large burden off of my family when they need guidance at the time of my passing.”

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-Ms. Jones

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Inglewood, CA 90305
Phone: (310) 677-9787
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