Stites on Estates

Category Archives: Retirement Planning

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Managing Risk: Inheritance Strategies for the Upper Middle Class

Posted in Estate Planning, Life Cycle Estate and Financial Planning, Long Term Care Insurance, Retirement Planning
Several months ago I read Cut Adrift: Families in Insecure Times by Marianne Cooper, a Stanford sociologist. Cooper’s chapters on the extremely professionally successful upper middle class and their project of “doing security” were particularly interesting. These families were operating an increasingly unstable career and social environment, and devoted tremendous energy to enhancing their own financial security.… Continue Reading

A Critical Look at Roth IRAs: The Marshmallow Is Not Always What It Seems

Posted in Income Tax Planning, Life Cycle Estate and Financial Planning, Retirement Planning
In the late 60s and early 70s at Bing Nursery School on Stanford’s campus, Walter Mischel conducted the famous “Marshmallow Experiment” on delayed gratification. Preschoolers were offered a choice between one marshmallow or cookie right away, or two if they waited about 15 minutes. When researchers tracked down study participants as adults, they found that the… Continue Reading

Life Cycle Estate and Financial Planning for Early Adulthood

Posted in Insurance, Life Cycle Estate and Financial Planning, Life Insurance, Retirement Planning
I believe effective life cycle estate and financial planning is anchored in the Quadrant of Facts, Forecasts, Life Stages, and Unexpected Events. Over the past several weeks, ten posts covered a lot of territory about Facts and Forecasts. This is a pivot point at which we begin exploring planning issues in the first of several Life… Continue Reading

Protecting Your Personal Pension From Volatile Equity Markets

Posted in Life Cycle Estate and Financial Planning, Retirement Planning
Our previous post explored a model of the cost of the promise you make to yourself to fund your retirement, but that model omitted a very important real-world risk: volatile equity markets. Most recently, the 2008 stock market crash changed many retirement plans for the worse. A 2009 study by the Urban Institute, “What the 2008 Stock… Continue Reading

A Sherlock Holmes Approach to Your Income Statement

Posted in Life Cycle Estate and Financial Planning, Retirement Planning
homesandwatsonI think “budgets” are the reason many more people don’t have a sensible strategy for reaching their financial goals. The word “budget” creates obstacles in two ways. First, budgets imply choices, tradeoffs, and the unpleasant word “no.” Second, most people lack even half the clarity about their spending that’s required to make a reasonably accurate budget. Without good… Continue Reading

Homestead Planning for Your Florida Property

Posted in Asset Protection, Estate Planning, Florida Estate Planning, Retirement Planning
floridabeachFlorida offers many advantages as a retirement haven compared to northern states (including no state income taxes and better weather). Another Florida feature (lesser-known but still quite important) is its homestead laws. “Homestead” can be a deceptively complex issue in snowbirds’ estate and tax planning when they finally become Florida residents, including asset protection, property tax savings, and restrictions on… Continue Reading

Supreme Court Denies Creditor Protection for Inherited IRAs

Posted in Asset Protection, Estate Planning, Retirement Planning
Earlier this year, in Clark v. Rameker, 573 U.S. ___ (2014), the Supreme Court resolved a circuit split and delivered bad news for debtors, finding that a debtor’s inherited IRA was includible in her bankruptcy estate. Clark is an important decision because it clarifies that IRA assets inherited by adult children or other beneficiaries are… Continue Reading

Florida Residency Planning for Kentuckians

Posted in Estate Planning, Florida Estate Planning, Income Tax Planning, Inheritance Tax Planning, Retirement Planning
pc10962-300x194If you are a Stites on Estates reader in a state where it’s cold in the winter, you have probably seen them: people who seem to live in your own neighborhood and golf at your club, but have a car with a Florida license plate. Who are those people? They’re the lucky ones: the Snowbirds… Continue Reading

Using a Funded Revocable Trust for Wealth Preservation in Old Age

Posted in Asset Protection, Estate Planning, Retirement Planning
surffunThe popular financial press is pretty crowded, just like the blogosphere.  Yet every once in a while, an article says something pretty simple that’s also really important, something that connects strongly with issues we see time and again in our practice. Last week, Howard Gold published that sort of piece on Marketwatch.com: “The biggest retirement… Continue Reading

Trust Planning for Upside Business Potential – part 2: Case Study of a Long Shot

Posted in Business Planning, Estate Planning, Estate Tax Planning, Retirement Planning
GolfManAs we saw in Part 1 of this series, a grantor retained annuity trust (or “GRAT”) can be a very effective way to remove the government as a 40% silent partner in the potential upside of a business venture in several types of circumstances. In the pre-2010 regime of low estate tax exemptions, two common types of circumstances were: (a) … Continue Reading

Trust Planning for Upside Business Potential – part 1

Posted in Business Planning, Estate Planning, Estate Tax Planning, Retirement Planning
SunnydockThe pursuit of wealth has long been part of the American Dream, and a positive feature of the current $5.34 million estate tax exemption (high by historic standards) is that entrepreneurs have more “run room” before the Federal government becomes a 40% silent partner in the upside of all the work, creativity, striving, and risk… Continue Reading

Using an LLC to Protect Assets for an Aging Parent

Posted in Asset Protection, Business Planning, Estate Planning, Retirement Planning
Willie_SuttonWillie Sutton is famous for allegedly answering a question about why he robbed banks with the brilliant retort: “Because that’s where the money is.” We can’t help but think of Sutton when we consider how commonly older, richer people become targets for economic exploitation.  Potential exploiters are many: domestic help, caregivers, economically dependent children, profligate spouses,… Continue Reading

Elective share statutes – hidden dangers for blended families – part 3: solutions

Posted in Asset Protection, Blended Families, Estate Planning, Retirement Planning
don and megan at dinnerWe hope this mini-series on the knotty estate planning issues presenting in the (fictional) later lives of the Drapers convinced you that blended families often face much greater risks to relationships, harmony, and the orderly flow of wealth than they might first realize. Elective share statutes are one of the main unrealized dangers. In part… Continue Reading

Elective share statutes: hidden dangers for blended families – part 2

Posted in Blended Families, Estate Planning, Retirement Planning
drapersatworkWhen a married couple doesn’t have the same beneficiaries in each of their estate plans, elective share statutes make it an unstable situation, as we began to see in part 1 — which ended with the fictional, widowed Megan Draper realizing that Don’s will had left her a lot of issues to consider. Let’s introduce… Continue Reading

Protecting family wealth by adapting parents’ estate plans for long term care insurance costs

Posted in Estate Planning, Insurance, Long Term Care Insurance, Retirement Planning
beachchairsFor retired persons or couples with less than $1.5 million to $2 million in wealth, potential long term care costs are one of the greatest risks they face.  Long term care costs can deplete parents’ assets, and also substantially reduce the eventual inheritances of adult children. Let’s consider these issues with a case study featuring… Continue Reading