Below is a brief glance at what you’ll find in this issue… May / June 2015
Powers of attorney: Springing vs. nonspringing
Estate planning typically focuses on what happens to a person’s children and assets when he or she dies. But it’s equally important (some might say more important) that a person have a plan for making critical financial and medical decisions if he or she becomes incapacitated. A crucial component of this plan is the power of attorney (POA). This article defines a POA and explains the difference between a springing and nonspringing POA. A sidebar explains the difference between a health care power of attorney and a living will.
Watch out for GST taxes
The GST tax is a flat 40% tax on asset transfers to “skip persons.” It’s in addition to gift and estate taxes, so it can take a significant bite out of a person’s hard-earned wealth. This article explains which types of transfers are taxable and discusses automatic allocation tax traps.
Retirement ahead? Choosing the right pension plan payout option requires planning
A decision that many retirees face is choosing the best option for receiving payouts from a pension plan. Would a lump-sum payment be the best option, or would it be better to go with an annuity? If the latter, is it better to go with single life or joint life? What about combining a single-life pension payout with a life insurance policy? This article explains that the answers depend on such factors as the beneficiary’s and spouse’s actuarial life expectancies, current health conditions and family medical histories, along with current financial needs and the possible desire to provide a spouse with a continuing source of current income.
Estate Planning Red Flag: You’ve designated the wrong beneficiary for your life insurance policy
Life insurance can be a powerful financial and estate planning tool, but its benefits can be reduced or even eliminated if the wrong beneficiary is designated or a person fails to change beneficiaries when his or her circumstances change. This brief article details three common pitfalls to avoid.
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