Your Financial Concerns
When faced with a catastrophic illness such as cancer, you have a lot on your mind. Here, we define some basic financial and legal terms. For more information, contact Benny Marshall at (615) 279-3435, or call your financial advisor. When your finances are in order, that's one less thing you have to worry about.
What to do with retirement funds?
If the decedent was the owner of an IRA or had a company retirement plan such as a 401(k), then the beneficiaries have several distribution options available. You must first determine if the death occured before or after the Required Beginning Date (RBD), which is defined as April 1st of the year following the year in which the person attains age 70½. If the IRA owner died before his/her RBD, spouse beneficiary may: 1) withdraw all funds and pay taxes on the distribution 2) disclaim in writing, all or a portion of the IRA assets within 9 months of date of death 3) roll over the IRA assets into his/her own IRA or treat the IURA as his/her own 4) establish the IRA as a "decedent/beneficiary IRA" and withdraw funds based on his/her "recalculated" single life expectancy beginning no later than the later of: December 31 of the year the deceased spouse would have reached age 70½. December 31 of the year in which the IRA owner died. A spouse beneficiary under age 59½ , may withdraw funds anytime without the 10% tax penalty.
If the IRA owner died after his/her RBD, the decedent's required minimum distribution must first be withdrawn for the year of the death. Then, the spouse beneficiary may: The same as 1, 2 and 3 above or 4) Establish a "decedent/beneficiary IRA" and withdraw funds based on a period not longer than the longer of the spouse beneficiary's recalculated single life expectancy or the decedents remaining term certain life expectancy using the decedent's age in the year of death (reduced by one year thereafter).
If you are a non-spousal beneficiary, please consult a financial advisor.
Living Will
A living will is a legal document that a person uses to make known his or her wishes regarding life prolonging medical treatments. A living will should not be confused with a living trust, which is a mechanism for holding and distributing a person't assets to avoid probate. It is important to have a living will as it informs your health care providers and your family about your desires for medical treatment in the event you are not able to speak for yourself.
Power of Attorney
A power of attorney is a legal instrument that is used to delegate legal authority to another. The person who signs (executes) a power of attorney is called the principle. The power of attorney gives legal authority to another person (called an agent or attorney-in-fact) to make property, financial and other legal decisions for the principle. A "Durable" power of attorney enables the agent to act for the principle even after the principle is not mentally competent or physically able to make decisions.
Wills
A will is a document by which a person regulates the rights of others over his or her property or family after death.
Pre-paid funeral
A pre-paid funeral contract is a contract to provide a funeral in the future. The purchase of a pre-paid funeral can allow the purchaser to plan the kind of funeral they will have and relieves next of kin of the burden of planning and paying for a funeral. With the cost of a funeral approaching $6,000.00, and probably rising in the future, it can also be a wise estate planning move as it can lock in the future cost of the funeral now.