A Refresher on Estate Planning Basics BML Wealth Management

Estate planning is a big deal. It’s a way for us to leave what we’ve built over the course of our lives to our loved ones. Gifts of property and belongings can pass on a sense of family, care, and love and can also help your loved ones financially.

So, what is the first and most important thing to do when it comes to estate planning? This may seem obvious, but the first thing is to do it. Plan out your estate. Think about who is getting what, and be specific about the details. Sure, there are plenty of other aspects to estate planning that matter, but if you have no plan at all and nothing set up, then none of those other things matter.

Another thing to consider, especially when it comes to your retirement accounts, is to ensure that you have the right beneficiary listed and that their name is spelled right. A simple mistake like spelling a name wrong can lead to a lot of problems when your estate is being handled. Additionally, it can be a good idea to have what is called a contingent beneficiary on your retirement accounts.[1] This alternate beneficiary will gain the funds in your accounts if your first listed beneficiary (usually you) is not able to receive them.[1] This allows you to pass on a retirement account seamlessly after your passing.

Another major concern when it comes to estate planning is taxes. Planning around taxes is a key part of anyone’s financial life. Tax mistakes can lead to the loss of more of your hard-earned money than you expected. One thing you can do to avoid some estate taxes is to give away some of your money before you pass away. The limit for tax-free gifts per year as of 2023 is $17,000.[2] This means that you can give any individual up to $17,000 per year as long as you don’t cross your lifetime gift tax amount, which is $12.92 million in 2023.[2] However, if you don’t give gifts while you’re alive, this tax-exempt limit doesn’t apply, and the full estate tax will be levied on whatever you leave to your heirs. If you are concerned about the amount of taxes that will be taken out of your estate, gifts can be a great way to mitigate some of those taxes.

 

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The commentary on this blog reflects the personal opinions, viewpoints, and analyses of BML Wealth Management’s employees providing such comments and should not be regarded as a description of advisory services provided by West Wealth Group, LLC. The views reflected in the commentary are subject to change at any time without notice. Nothing on this blog constitutes investment advice. Any mention of a particular security and related performance data is not a recommendation to buy or sell that security. Investing involves risk, including the potential loss of principal. No investment strategy can guarantee a profit or protect against loss in periods of declining values. Past performance is no guarantee of future returns.

Investment advisory services through West Wealth Group, LLC, an SEC Registered Investment Adviser. BML Wealth Management and West Wealth Group, LLC are affiliated entities. Insurance Services are offered through BML Wealth & Insurance Services, California Insurance License #0M15550.

We do not provide tax or legal advice. All individuals are encouraged to seek guidance from qualified professionals regarding their personal situation. Any references to protection benefits or steady and reliable income streams in this guide refer only to fixed insurance products. They do not refer, in any way, to securities or investment advisory products.