Financial Focus: Estate Planning: "Don't worry, my family has me covered"!

By Professor Anthony Rivieccio MBA PFA

All of our lives, we are trying to accumulate ” ” Assets” . Yes, it is true, that Assets increase our Net Worth. Net Worth is the number that tells you what your Assets are worth while your alive – and- dead. Assets include; Cash, Real Property, Cats, Furniture, Jewelry, Collectibles, Retirement plans, Life Insurance, investment & Bank accounts.

So when you die, what happens to those Assets? Want to leave them to someone? How do you do that, free of Probate and any other problems or issue that can come up?

Meeting with an accountant, a financial planner and an estate attorney is the best way to sort through this complex issue, but here are some estate planning tips to get you started.

— Draw up a will.

— Check your beneficiaries.

— Set up a trust.

— Convert traditional retirement accounts to Roth accounts.

— Gift your money while you’re alive … but wisely.

Having a will

Only about 33% of people say they have a will, according to the 2021 Estate Planning and Wills Study that surveyed 2,500 Americans, published by Caring.com. Of those who don’t have a will, 34% say it’s because they haven’t gotten around to it.

Without a will, your estate will be divided in probate court, meaning someone else decides who gets your money.

Beneficiary

One way to avoid probate court is to have beneficiaries named for your assets. Some accounts, such as retirement funds and life insurance policies, let owners name beneficiaries who will receive that particular asset.

Trusts

Trusts can be set up in several ways, but irrevocable, or permanent, trusts may offer the most tax benefits. When money is put into an irrevocable trust, the assets no longer belong to you. They belong to the trust itself. As a result, the money cannot be subject to estate taxes. While a trustee ultimately controls the money, you can create stipulations on its use, and money can be distributed from a trust even while you are alive.

Retirement

If you’re looking for how to pass money to heirs tax free, that may be accomplished by converting traditional accounts to Roth accounts. The converted amount is subject to regular income taxes, but withdrawals — either by you or your heirs — are tax free.

Gifting

You might not have to worry about estate tax planning if you simply give away your money while you’re alive. As of 2021, the IRS allows individuals to give up to $15,000 per person per year in gifts. If your goal is avoiding estate tax, those gifts can bring its value down. The money is also tax-free for recipients.

These are but just a few examples.

I tell many of my Clients , and Student’s, that if I wrote a book chapter for every ” Estate Planning” case I have been involved with for the last 30 years and write a book and gave it to Steven Spielburg, in my opinion, it would probably be the best ” horror” movie in the world today. And I have just the title: ” Don’t worry, my family has me covered”.

Accumulating Assets are great!. Make sure you properly transfer them to heirs before you die!.

Professor Anthony Rivieccio, MBA PFA, is the founder of The Financial Advisors Group, celebrating its 25th year as a full service financial planning & investment firm . Anthony is also owner of Rivieccio Financial Advisors, a virtual only financial advisory firm, opened in 2021. Mr. Rivieccio, a recognized financial expert since 1986, has been featured by many national and local media including: Kiplinger’s Personal Finance, The New York Post, News 12 The Bronx, Bloomberg News Radio, BronxNet Television, the Norwood News, The West Side Manhattan Gazette, Labor Press Magazine, Financial Planning Magazine, WINS 1010 Radio, The Co-Op City News, The Bronx News, thisisthebronX.info and The Bronx Chronicle. Mr. Rivieccio also pens a financial article called “Money Talk”. Anthony is also currently an Adjunct Professor of Business, Finance & Accounting for both, City University of New York & Monroe College, a Private University. For financial assistance, Anthony can be reached at (347) 575-5045. Have Facebook? My personal page is www.facebook.com/anthonyfromthebronx