With a few simple actions, you can ensure your estate planning is effective

Whether your estate plan is simple or complex, there are many details, which are often overlooked, that can undermine your plan’s effectiveness. Are you aware of these common estate planning mistakes?

• Titling property jointly with your children as a substitute for a will. Unlike a will, a transfer of an interest in your property is irrevocable, which may prevent you from changing the disposition if circumstances change before your death. Also, titling your personal residence jointly can result in partial loss of the capital gain exclusion if the property is sold before your death. 
• Failing to plan for the possibility of children getting divorced or having problems with creditors. Parents may regret having made outright gifts to their children if they subsequently divorce and an ex-son- or daughter-in-law is awarded an interest in the gifted property by a court. Or, in another situation, gifted property may be taken pursuant to a legal judgment against the child. Such problems can be minimized through proper use of trusts or a business entity, such as a limited liability company. 
• Failing to make sure that all your assets pass in accordance with your wishes upon your death. Many types of assets, including life insurance, IRAs, and brokerage accounts, can pass to your heirs or others based upon beneficiary designations. The provisions of your will cannot change a beneficiary designation. Remember to account for things you’ve already designated. You should review your will, as well as all other beneficiary designations, when formulating your estate plan.
• Underestimating the true value of your estate for Federal estate tax purposes. Many people are unaware that the proceeds of their life insurance are includable in their taxable estates if they own the policies. This could bring the total value of their estates to more than the amount sheltered from estate tax by the applicable exclusion amount. For people who pass away in 2022, the exemption amount will be $12.06 million (it's $11.7 million for 2021). For a married couple, that comes to a combined exemption of $24.12 million.
• Failing to consider state death taxes in light of recent changes in the law. Many states have “decoupled” their death taxes from the Federal estate tax, which means your estate could be subject to death tax in a state even if no Federal estate tax is due. This could result in an unpleasant surprise to your heirs upon your death, one that might be avoidable with proper planning.
• The laws of each state where you own property should be carefully reviewed in order to determine the potential exposure to state death taxes and how to minimize them. 
• Failing to maximize the benefits of the income tax basis “step-up” at death. Low-basis/high-value assets should generally not be given away during your lifetime. The basis for capital gain computation purposes will be increased to fair market value at death, but the basis remains at the property’s original cost if the asset is given away. 

 
Some of these common mistakes can be avoided with a few, simple actions. Early and thorough planning can help you work towards your financial goals and leave a lasting legacy.
 
Important Disclosures
Content in this material is for educational and general information only and not intended to provide specific advice or recommendations for any individual.
This information is not intended to be a substitute for specific individualized tax or legal advice. We suggest that you discuss your specific situation with a qualified tax or legal advisor.
LPL Financial Representatives offer access to Trust Services through The Private Trust Company N.A., an affiliate of LPL Financial.
This article was prepared by FMeX.
LPL Tracking #1-05298532
 

Five easy pointers to help you plan during all of your retirement years

If you’re retired, there’s good news in that you’ll probably live longer and perhaps better than your parents and grandparents did. The bad news: You’ll live a longer and perhaps more expensive life, too.

You face decisions your parents or grandparents likely didn’t face before you.
This means every year you need to realistically estimate your life-expectancy to manage the foundation for your retirement (which might include years of less-than-great-health).

Let’s say you are 58 – you need to plan for the next 37 years – more than a third of your life.

Pointers to Help Plan During Retirement
Here are five easy pointers, in ascending order of importance:
5. Costs of advice. You probably have a lot of questions. How much do you pay someone now to help you coordinate your investments? How much do your investments cost?

Is your portfolio sufficiently diversified? Did you buy annuity policies that you don’t really understand and that may become expensive for you to own? Do you need someone to only manage your investments or to also provide financial planning advice?
The average American spends more time analyzing the cost of a new TV than the costs and qualities of a financial professional.

4. Social Security. Don’t decide about benefits and lump-sum pension choices without discussing your options with a financial planner – or you may leave significant money behind. Remember too that the Social Security Administration won’t necessarily provide advice on your best strategies.

3. Your home and future health. Consider the final 15-plus years of your life. Where will you live when you’re 80?
In a large home with stairs? Will most of your wealth center around your home as your retirement years tick past? Who will care for you if you can’t yourself (don’t plan on a spouse, as you may become a widow or widower)?
Get objective advice on long-term care planning and your options for a reverse mortgage to convert your home equity into cash.

2. Know what you own. Are you one of the tens of thousands with half-forgotten old 401(k) plans from previous employers? Have multiple accounts with various brokers? Outdated estate documents or long-forgotten life insurance policies?

Consolidate your holdings and paper trail, a kindness not only to your current recordkeeping but also to your future heirs.

1. Make your wants clear. Include your adult children or siblings in a frank discussion about where your assets are and your preferences for treatment if you end up in the hospital.

You don’t need to give specific dollar information, but family or friends need to know your preferences and where to find your assets if you die or can no longer communicate.

Death and taxes are inevitabilities we all face. Make that time as easy as you can for your executor and heirs.
 
Important Disclosures
The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual product or security. To determine which products(s) or investment(s) may be appropriate for you, consult your financial professional prior to purchasing or investing.
All information is believed to be from reliable sources; however LPL Financial makes no representation as to its completeness or accuracy.
This article was prepared by FMeX.
LPL Tracking #1-05290107

If you've moved beyond basic financial advice—live below your means and set aside funds for a rainy day—you may be wondering what to actually do with these rainy-day funds. With inflation on the rise, keeping excess cash in a checking or savings account could erode your purchasing power over time.1 What should you do to put these extra funds to use? Below, learn more about four alternatives to checking and savings accounts.

Certificates of Deposit (CDs)
CDs generally pay a higher interest rate than savings accounts. In exchange for this higher rate, the money can be tougher to access in an emergency—if you cash out a CD before it matures, you may forfeit some or all of the interest you've earned. However, if you're setting aside money you won't need for a while, or if you'd prefer to have your money inaccessible, so you're not tempted to spend it, a CD may be a good way to boost your interest rate while doing so.

Peer-to-Peer Lending
If you'd like to earn some interest while helping others, consider signing up for a peer-to-peer lending service. These services match prospective individual lenders with others who wish to borrow funds, allowing you to lend money directly to someone for their needs, such as to help them pay rent, purchase a vehicle, or even start a business. Unlike traditional savings accounts, this type of account isn't FDIC-insured and carries a risk of loss if the borrower defaults on the loan. Don't put more into a peer-to-peer account than you're willing to lose.

High-Dividend Stocks
Investing in a stock that pays a hefty dividend could potentially let your money grow. When a company pays a dividend, it distributes them to everyone who holds a share of stock as of the distribution date—and reinvesting these dividends back into the underlying stock may allow you to grow your holdings for free. Like peer-to-peer lending, stock investing carries a risk of loss, and it's important to research any stock before putting money into it.

Online Savings Accounts
Many online-only savings options offer relatively high interest rates, even in today's low interest rate environment. Because these online banks don't have the same overhead costs as brick-and-mortar banks, they can offer higher interest rates and more favorable terms. And because they're entirely digital, they can allow you to easily transfer money into and out of the account or even access funds through an ATM.2

Important Disclosures:
​The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual security. To determine which investment(s) may be appropriate for you, consult your financial professional prior to investing.
Investing involves risks including possible loss of principal. No investment strategy or risk management technique can guarantee return or eliminate risk in all market environments.
The payment of dividends is not guaranteed. Companies may reduce or eliminate the payment of dividends at any given time.
All information is believed to be from reliable sources; however LPL Financial makes no representation as to its completeness or accuracy.
 
1 https://www.investopedia.com/terms/p/purchasingpower.asp
2 https://financebuzz.com/how-does-online-savings-account-work
 
 
LPL Tracking #1-05176094