Passing Down An Inheritance

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The Story:

Leaving an inheritance is often a goal, but how can it be done effectively? We talk through the different mistakes to avoid and the things to pay attention to when estate planning.

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The Show:

As Baby Boomers, the generation born between 1946 and 1964, pass down their wealth, what major mistakes should people try to avoid when it comes to inheritance? A recent article in the Wall Street Journal talked about the impact this inheritance could have. The average inheritance is $212k but some people decide to gift their children and grandchildren while they are still alive. Don shares some of the information you’ll want to know about the gift limit and exceptions.

When it comes to passing down your IRAs, there are designated and non-designated beneficiaries. Designated beneficiaries are someone like a spouse or child, whereas non-designated beneficiaries are something like an estate or charity. The SECURE Act further distinguished it to eligible designated beneficiary and non-eligible designated beneficiary. Don talks through the differences between the two by sharing examples and why it matters for your estate plan. The SECURE Act 2.0 is currently being worked on, so more changes are likely ahead.

Did you know that a beneficiary designation overrides a will? Be sure your designations are up-to-date and lists who you want to inherit your assets when the time comes. The rules are always changing, so you want to make sure it’s set up as efficiently as possible. Reach out to a financial advisor to find out if your investments will be properly left to your heirs.

Finally, on the Cash Connection, Linda in Princeton wants to know how to help her 18-year-old off to the right start with retirement savings. Don explains the benefits of contributing to a Roth IRA, even as a young adult, to take advantage of the tax breaks.

Listen to the entire episode or use the timestamps below to skip ahead.

[0:38] – How does Don like to travel?

[3:30] – Baby Boomers are starting to distribute record amounts of wealth.

[5:29] – What’s the average inheritance?

[6:04] – Some choose to gift to their children and grandchildren while they are alive.

[9:21] – How did the SECURE Act impact inheritances?

[10:54] – There are designated beneficiaries and non-designated beneficiaries.

[15:55] – How does the beneficiary form differ from a will?

[19:36] – Cash Connection: What’s the best way to help my 18-year-old with retirement savings?

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About Don:

Donald W. Cash – CPA, CFP® is an independent advisor. Don began his career in 1985 as an accountant after graduating Rutgers University. In 1990 he entered the field of Estate Planning with a concentration in long term care planning. Don has been advising clients in the baby boomer and retirement market for 20 years. He has helped over 1,000 families with their planning needs. He advocates a holistic approach to Estate and Financial Planning as has relationships with other professionals including Attorneys, CPA’s, Mortgage Specialists, Insurance Specialists and Asset Managers. Don is married to Cathy and have 4 children, Carly, DJ, Nick and Tori. They live in Freehold, NJ.

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