The Connection Between Estate Planning and Retirement Planning

Estate Planning and Retirement Planning are closely tied and yet significantly different.

Retirement planning is about money. People need to plan ahead in order to have enough money for retirement. Estate planning is about more than money. However, a major part of estate planning does involve taking care of your money and other assets. When thinking of the connection between estate planning and retirement, trusts may be the first place to start.

Estate Planning and Retirement Planning Provide Income for the Future

Some trusts provide income streams for the grantor, and sometimes for the beneficiaries:

  • Charitable Remainder Trusts. With a charitable remainder trust, the grantor receives an annuity for the term of the trust. Upon termination, the remaining funds pass to the charity named in the trust document.
  • Dynasty Trusts. This trust may provide income to the grantor and beneficiaries for generations. In addition, a dynasty trust may reduce or eliminate gift taxes, estate taxes, and generation-skipping transfer taxes.
  • Grantor-Retained Annuity Trust (GRAT). In addition to reducing taxes when transferring wealth to heirs, the GRAT pays the grantor an annuity.
  • Grantor-Retained UniTrust (GRUT). Similar to a GRAT, the grantor receives annual payments that may be used to help with retirement costs.

For some trusts, it’s more about protecting and preserving

And Saving for Retirement Needs

Forming some trusts well before retirement may be a good solution when it comes to paying for retirement:

Medicaid Asset Protection Trust. Many people need long-term care as they grow older. This type of care is very expensive, whether provided at home or in a 24/7 nursing facility. Married grantors may protect money they may need to pay for the medical needs of one spouse, while providing income for the other.

Be Informed About Estate Planning and Retirement Planning.

Learn how to connect estate planning to retirement planning by consulting with an attorney. Other options may be suggested. For example, a standalone retirement trust can be created to act as beneficiary of funds remaining in your IRAs upon your death. Although not specifically related to your own retirement, it is an option for passing your IRAs on to your family.

As always, trusts are complicated and should not be attempted without the advice of a skilled attorney. As a Florida attorney board certified in Wills, Trusts & Estates, Attorney John Mangan offers effective estate planning to his clients. To schedule an appointment, call us at 772-324-9050 or fill out our Contact Form. Our office is conveniently located in Palm City, Florida.

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