The last step of Oak Harvest Retirement Process completing your retirement plan is estate. Why is this important? And what do you need to be aware of when building an estate plan for your family?
Hi, I’m Troy Sharpe, CEO of Oak Harvest financial group CERTIFIED FINANCIAL PLANNER™ Professional (CFP®) . And host of the retirement income show. So step one, step two, step three of retirement. Three-sixty investment in risk management, income planning, and tax planning. Everything in the Oak Harvest Retirement Process process is structured in a very methodical way to make sure that we’re doing things in the right sequence in order to get the most out of each planning opportunity along the way.
Step five estate planning. The reason this is at the end is because once we have the investment plan, the income plan, the tax plan and the health care plan in place, we have a pretty good idea, at least a range. When we do a sensitivity analysis of how much money should be left, what are the potential tax ramifications of the investment income and tax plan with what’s left of.
And we’ve taken care of healthcare planning with step four. So this gives us a really good idea of how much money is going to be left so we can help to figure out what are we going to give to charity? What are we going to give to the kids? Whether they deserve it or they don’t deserve it. And where do we want our money to go?
And to make sure we keep more of it, not the government. So everything about Oak Harvest Retirement Process, it’s a very methodical, structured process that helps you get the most out of your retirement. Everything that we do is based on answering the big questions. I’ve sat with thousands of families, just like you over the course of my career.
And they all have unique circumstances, but they also all have the same big questions. Do I have enough? Can I retire? How long will my money last? How do I pay less tax? And when something happens, Will my family be okay. That’s not, if we’re all mortal, something will happen to us at some point. And all of the golden treasures that we’ve accumulated.
They’re going to go to someone else. Now, if you don’t have an estate plan, you are signing up for the government plan and the government does have a plan for your money. So this is very important that we take care of step five. And not only to take care of it initially, but we have to stay up to date because circumstances change.
You’ll have grandchildren that are born. Maybe you want to disinherit some of your kids, maybe new charities you want to give money to the tax laws will change. Investment performance will be different than assumed from the outset. So it’s not just getting the plan in place. It’s making sure it’s monitored and updated as time goes on.
So will your family be okay? That’s the big question that estate planning and. Now some common mistakes that we often see is first you have no plan because again, if you have no estate plan, you’re signing up for the government plan. And at the end of this video, I’m going to show you what the government plan was not too long ago for your money.
And I believe it’s coming back fairly soon, possibly for your money. Those that have a plan often, they don’t understand the plan. Again, I’ve sat with thousands of families and I see this all the time. Those that have taken the time to put together an estate plan. The wide majority do not understand the plan.
They do not keep it up to date and they misuse it. This is where working with a financial planner, a certified financial planner as the quarterback of the team or the captain of the ship helps all these different pieces of Oak Harvest Retirement Process work together. They’re all ingredients in the recipe and we want the recipe to come out.
We want it tasting good. We want to eat that cake. We want to taste that pizza. So if we don’t have all the ingredients and they’re not cooked properly, it’s not going to be a good product that can. Not understanding the consequences of not having a plan. I’m going to do a special video on the consequences of what I’ve seen some specific cases over the course of my career.
And I really want to drive this point home the consequences of not having an estate plan, outdated beneficiary. I had a client come in one time, uh, was a million dollars. She wasn’t a client, but her husband had passed away and he never changed the beneficiary on his retirement account from almost 40 years ago that he established when he was working a million dollars, went to the ex-wife because the beneficiaries were outdated.
Once he got divorced, remarried, never changed the beneficiary. She thought she was going to get that million dollar IRA. She came to me for help. It went to the next. Improper titling of accounts a little bit more advanced here because it involves specific legal tools, but big, big mistake. We often see accounts titled improperly.
Once we have legal tools, whether they’re trusts or, or LLCs or family partnerships not transferring the assets into those legal tools, renders them useless. So this is a big mistake, not working with a certified financial planner profession. The CFP is the quarterback of the team. You need an attorney to draft the legal tools, but estate planning is a financial planning is an element of financial planning going to an attorney, oftentimes yields just the, not the best result for you because the attorney isn’t looking at the entire financial plan, just like the CPA.
Isn’t looking at your entire financial. The CFP is the quarterback of your team. You need a certified financial planner on your team, not updating the plan as time goes along. This is a big mistake. I see. Oftentimes I see this three, four or five times a week where the last time someone had their will or their trust or whatever it is updated or looked at was 2004, 2005, 2009.
That’s way too long to go without updating your estate plan. Most of these plans. That haven’t been updated in 20 years. Many of them have elements to them that no longer are what the people I sit with, what they want to happen or elements within that plan are simply outdated and no longer valid. Now here’s what I said earlier.
We’re going to look at this is the year 2000. If you died in the year 2000, this is just 20 years ago. The estate tax exemption was 675,000. This means that any dollar you had above $675,000 upon your. Was taxed at 55%. This was just 20 years ago. Okay. So understanding that the estate tax laws change constantly right now, you can pass away with a whole lot of money and not pay any estate taxes, but it’s not going to last that way forever.
As a matter of fact, this upcoming presidential election in November is going to have a huge impact on the estate tax laws in this country. If Joe Biden. This is going to change dramatically from, from what the limits currently are. Their stated tax plan says we’re going to come after people who have accumulated wealth and we’re going to tax those dollars.
Not. While you’re living at a higher rate, but when you die at a higher rate, so most of you watching this video, you have accumulated assets. This pertains specifically to you. We need a plan. This is where Oak Harvest Retirement Process helps to address these issues. And working with a certified financial planner professional can incorporate all the aspects of retirement planning into.
Financial plan that helps you accomplish what you’re trying to do. Take a minute to subscribe to the channel down below, hit that little bell icon. So you can be notified when we upload new content and share this video with a friend or family member so they can be more connected to their money.