Southern Coast Home Design - Index

Southern Coast Home Design - southerncoasthomedesign.com - Index

tions, your will and any trusts that you establish.
A trust that is commonly used to provide
income to your spouse but ultimately pass
assets to your children is a Qualified Terminal
Interest Property Trust (QTIP). It’s a popular
option for couples with substantial assets and
children from a prior marriage, but it can also
make sense to ensure that your intended wishes
are carried out should your surviving spouse
remarry. With a QTIP, your assets, including
your house, can be passed to the trust upon
your death. The surviving spouse can stay in
the house and draw an income from the trust.
When your spouse dies, the assets pass to your
children. A Financial Advisor can provide a
range of trust options and you can decide with
the assistance of your legal and tax advisor
which would work best for you.
Designating Your Retirement Assets
Properly designating beneficiaries is critical
for your retirement accounts, annuities and
other forms of insurance because the proceeds
go to listed beneficiaries outside the dictates of
your will. Therefore, the best way to see that
your wishes are carried out is to keep your
beneficiaries up to date. If you have a 401(k)
or other qualified plan and your children are
beneficiaries, your new spouse needs to con-
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sent to that arrangement. Without written
approval, your spouse becomes the beneficiary
by law, even if your children are listed.
Individual Retirement Accounts (IRAs) do not
require spousal consent to change beneficiaries.
Although 401(k)s and IRAs are becoming
more popular, you may also be eligible for a
defined benefit pension plan through an
employer. If you begin taking distributions
from the plan before marriage, you won’t be
able to change the defined benefit payment
option you elected. However, if you have not
started receiving benefits, you will have the
option of choosing a joint and survivor option
which will continue payment of all or a portion
on your pension to your spouse if still living
upon your death. Alternatively, you could elect
payments over just your lifetime, provided
your spouse consents. Which option is best for
you may depend on whether your spouse
would need the income and your respective
ages, health and family history of longevity.
Your Financial Advisor can help you create a
retirement income plan taking into account all
of these options.
Review State Laws
While most people are aware of federal
estate laws, they are often surprised to learn
that state laws may also impact their estate. In
that regard, it’s important to work with an
estate-planning attorney and tax advisor who
practice in the state where you reside. The
rules of that state may require a different strategy
or require the filing of additional documents.
In community property states like
Arizona, California and Texas, for example,
assets acquired during the marriage are usually
divided evenly between spouses (provided no
election for survivorship rights was made).
Michael Falcon is Managing Director and
Head of the Retirement Group at Merrill
Lynch.
CONTACT A MERRILL LYNCH FINANCIAL
ADVISOR:
815 South Palafox Street, Pensacola, FL
32502, 850-434-7075
133 Racetrack Road NW, Ft. Walton Beach, FL
32547, 850-864-6115
480 Jenks Avenue, Panama City, FL
32401, 850-913-2812
601 North Section Street, Fairhope, AL
36532, 251-990-2361
3674 Dauphin Street, Mobile, AL, 36608,
251-345-0234