Many people think that if they draft their will, open up a retirement account and draft powers of attorney, then their estate plan is complete for the duration. What people don’t realize, however, is that comprehensive estate planning — planning that truly sets you up for retirement, reduces tax liabilities and preserves assets for your heirs — is not complete unless assets are structured in such as way as to eliminate unnecessary tax burdens and risk.
If you have a retirement plan — and you definitely should — then it’s important to understand that disbursement of any remaining retirement funds upon death will not be controlled by your will. To exercise as much control as possible and preserve the value of your plan, it is an excellent idea to shelter those assets in trusts or other entities.
At The Flanigan Law Group, we understand the importance of coordinated tax and estate planning. In many cases, our clients enjoy the strongest possible tax protection through the creation of appropriate business entities, trusts and other structures.
As you probably know, retirement plans such as 401(k)s and IRAs are deferred-tax plans. If you don’t handle these accounts with a view toward the eventual tax outcome, then you risk placing a significant tax burden on your beneficiaries. Trusts and other vehicles can shelter your retirement assets, as well as provide an effective way of disbursing funds.
Tax planning and retirement planning go hand in hand. To learn more about these matters, please see The Flanigan Law Group’s page on Tax Planning in Orange County.