Military Officer - January 2008 - (Page 52) financialforum Time to Update It’s important to have an up-to-date estate plan that fits your current financial situation so you can receive the greatest benefit. Phil Dyer, CFP, helps you get started. B Estate Planning Help From MOAA ■ Order MOAA’s Estate Planning Guide at www .moaa.org/infoexchange (click on Estate Planning Guide) or contact MOAA’s Member Service Center at (800) 234-MOAA (6622). ased on anecdotal evidence gathered in my 12 years as a financial planner, creating a good estate plan and keeping it updated ranks somewhere below visiting the dentist and cleaning up after the dog on most people’s list of least-favorite activities. Unfortunately, because all of us eventually will need an estate plan, avoidance and procrastination rarely are the best policies. So, is it time for you to update — or implement — an estate plan? Consider the following: ■ If it’s been more than five years since your estate plan was updated, your old plan likely is out-of-date. Changes in the federal estate and gift tax system have occurred in the past five years, and many states have restructured their estate or inheritance tax systems. As a result, many older wills and trusts are not up-to-date and might not provide the greatest benefit for your current financial situation. At a minimum, review your will and other documents every five years or any time circumstances significantly change. ■ Have you had a major life event recently? Major life events include marriage, divorce, birth of a child, loss of a spouse, military deployment, and retirement. All of these major life events should trigger an estate plan review to ensure your documents support your new situation. One potential problem area is if you move from a community property state to a separate property state or vice versa, as this can change the best way to hold property depending on state law. ■ Do you need a trust? Depending on how difficult (or expensive) the probate process is in your state, if you own out-of-state real estate or have a blended family, a non-U.S. citizen spouse, a special-needs child or another dependent, or have assets in excess of the current federal Estate Tax exemption of $2 million, you might need to add one or more trusts to your estate plan. ■ Do you have a plan for mental or physical incapacity? Advanced medical directives, living wills, and durable powers of attorney all can be key documents in planning for mental or physical incapacity. However, new Health Insurance Portability and Accountability Act (HIPAA) rules and regulations have rendered many older medical directives, living wills, and related documents obsolete. Make sure your documents support your current wishes and are in compliance with your state’s laws. ■ Are all your beneficiary designations up-to-date? If you have had a change in your family situation, make sure you have reviewed the beneficiary designations on all life insurance policies, retirement accounts, IRAs, and annuities. Improper beneficiary designations can result in assets going to the wrong person or being subject to unfavorable tax treatment. MO — Former Army Capt. Phil Dyer, CFP®, is deputy director, Benefits Information and Financial Education. To find a financial planner near you, contact Garrett Planning Network at (866) MOAA-GPN (662-2476) or www.moaa .org/garrett, or visit www.moaa.org/financial center for other resources. PHOTO: SEAN SHANAHAN 52 MILITARY OFFICER JANUARY 2008 http://www.moaa.org/infoexchange http://www.moaa.org/infoexchange http://www.moaa.org/garrett http://www.moaa.org/garrett http://www.moaa.org/financialcenter http://www.moaa.org/financialcenter
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