One of the most important considerations when writing a will or trust is who will inherit your estate. The process of selecting a beneficiary or beneficiaries for your assets is a personal and emotional process. There are many factors to consider: 

• Who depends on you financially?
• Who are your immediate and extended family members?
• Are there any assets you would like to remain in the family?
• Are there any family you do not want to include in your estate plan?
• Who has your best interests in mind?
• Do you want to support any charities or organizations?

Why Do You Need a Beneficiary?

No matter the structure of your family, age or the size of your estate, it is important to designate a beneficiary or beneficiaries to inherit your assets when you die. Sometimes it is difficult to think about the future, one’s death, or family dynamics; however, it is essential not to postpone thinking about these decisions. If you die without named beneficiaries in a will, living trust, or payable upon death accounts, you have no control over how your assets are distributed after your death.

Who Should You Select as Your Beneficiaries?

When selecting beneficiaries for a will, living trust, or payable on death account, there are two types of beneficiaries: primary and contingent. A primary beneficiary is the first person you want to inherit your assets while a contingent beneficiary is the second person you want to inherit your assets if the first person is deceased or unable.

In addition, there are several situations to consider when selecting a beneficiary or beneficiaries:

• If you are single
  If you are single, you may wish to share your assets with your children, grandchildren, parents, siblings, or extended family.
• If you are in a relationship
  If you are married or have an unmarried partner, you may wish to share your assets with your spouse or unmarried partner, your children or grandchildren, your spouse’s or unmarried partner’s children or grandchildren, your parents, siblings, or extended family.
• If you don’t want to include your family
  A disagreement or conflict of interests between family members may cause you to disinherit your family or specific family members.   If you don’t want to include your immediate family or a specific family member in your estate, you may wish to share your assets with friends, distant relatives, or charities.
• If you don’t have children or family members
  If you are do not have any children or family members, you may wish to share your assets with close friends, non-profit organizations, or charities.  It is not uncommon to select charities or non-profit organizations that share your interests or beliefs as beneficiaries in your estate.

In Conclusion…

When creating your will, living trust, or payable upon death accounts, it is important to select beneficiaries that represent your interests and personal responsibilities. Making these tough, emotional decisions will give you peace of mind that your assets will be distributed according to your wishes. In addition, your beneficiaries can focus on the honor of your memory and not focus on the stress of an unplanned estate after your death.

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Inflation is the decline of purchasing power of currency and the general increase in prices of goods and services over time.  This means that a unit of currency buys less today than it did in years past.  Over the last few years, the inflation rate has grown considerably, which has impacted our cost of living and resulted in the slowing of economic growth.  

Inflation is caused by an increase in the supply of money and credit that overstimulates the economy.  Inflation can be further driven when the demand for goods and services exceeds the production capacity rising production costs and increasing prices, or when prices and wages rise to maintain cost of living.   

How does Inflation Affect Retirement?

One of the goals of estate planning is to put enough money away for retirement.  However, it can be difficult to know what things will cost in the future and the one thing that most people don’t consider when planning for retirement is inflation. 

Inflation has a significant influence on the value of your retirement dollars, the cost of living, the cost of medical and healthcare services, and the federal government’s contribution to qualified retirement plans and Social Security benefits.  Therefore, it is important and beneficial to allow for inflation when making your retirement plans. 

According to the LIMRA Secure Retirement Institute, research shows that a 2% annual inflation rate can cause a shortfall of $73,376 in retirees’ benefits at the end of a 20-year period.  This model is based on a fixed monthly income of $1,341, which is the average monthly benefit paid by Social Security.

3 Way to Protect Your Investments & Assets

How can you minimize the impact of inflation on your retirement plans? Here are three recommendations that can help:

1. Maximize your Social Security

Choose to defer your Social Security Income until you are 70, which ensures that you get the most out of your benefits

2. Select investments that increase with inflation

Some investments and insurance products are more likely to adjust to inflation better than others.  The exchange may be less income now, but the future payoff will increase profitability. 

Potential investments are:

• TIPS (Treasury Inflation Protected Securities)
• Inflation Indexed Immediate Annuities
• Inflation Protected Bond Funds
• Floating Rate Funds
• Dividend Paying Stock Index Funds
• Real Estate

Insurance products:

• Long-term Care Insurance
• Term Life Insurance
• Whole Life Insurance

3. Reduce Expenses

Reduce housing costs and unnecessary spending.  Create a realistic retirement budget to maximize financial assets.

Conclusion

Being prepared and using the best financial tools can help you prepare for retirement.  If you have any questions about how today’s inflation rates may impact your retirement, please contact our firm or your trusted financial advisor.

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Prince’s death has left questions about who will inherit his fortune.

Despite his international popularity, Prince led a private life when he wasn’t performing. So it hasn’t been made public whether Prince had a will.

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