One consequence of the increased longevity that people enjoy today is that they need more financial support to survive comfortably through the additional years that may be granted to them. Reportedly, only one in three of us is able to survive financially into our 90s. In fact, a study conducted by a well-known association of retired persons found that two out of three persons were more worried about running out of money than about dying! These facts highlight the importance of estate planning in Texas and other jurisdictions.
With the increased years of living and changes in the federal estate tax structures, some of the traditional purposes of estate planning have changed. Those purposes have given way to a more immediate need for estate planning. Protecting assets so that one may live comfortably for many years after retirement is now a central focus of estate planning.
The protection of assets may be assisted by reducing the outlay of gifts from the benefactor to beneficiaries each year during life. Eliminating this once-common strategy may save the individual from running out of money. Gifts should only be given when it is clear that they will not impede the benefactor's own need for survival in later years.
It may even become necessary to change one's domicile for estate tax purposes. This is due to the whopping state income taxes garnered by some big states. Some states may be attractive to reside in, on the other hand, due to their statutory programs for funding programs that guarantee death with dignity.
Another new tool is a retirement trust. These allow the passing of retirement funds onto the person's children where the funds may accumulate tax-free into astounding compound accumulations. These and other tools of the estate planner are complex and must be coordinated seamlessly with the total estate planning structure, in conformance with Texas law. This will be best accomplished by having the services of an experienced estate planning attorney and other experts where appropriate.
Source: wealthmanagement.com, "Estate Planning for an Aging Population", John M. Goralka, July 5, 2016