Aging Options

Another Example of Traditional Estate Planning that Misses the Mark

Save as PDF

Successful retirement is all about having plenty of money. If you just make sure you have ample investments and a steady income, you’ll enjoy retirement bliss.

Sound familiar? If you read articles about retirement in the financial press, this seems to be the message you’ll hear, over and over. We just ran across another example – this one from the Wealth Advisor website, called “Your Estate Plan Needs an Update, Even If it’s New.” It’s not that the information is bad or erroneous, just that the underlying assumption of the article is, in our opinion, off base. It’s the same kind of one-dimensional approach that gets retirees into trouble by lulling them into a false sense of security and causing them to think that a financial plan and a retirement plan are one and the same. In fact, building your retirement around the sole issue of finances is like building a stool with one leg! It’s not very stable, and not very secure.

The gist of the Wealth Advisor article is that the new tax laws that went into effect at the start of 2018 have dramatically changed the advice many estate planning experts are giving to their clients. “Even if you had your paperwork set up a few years ago, all of your documents are now out of date, thanks to new tax laws that went into effect at the turn of the year,” says the article, which appeared in the past few days. “Strategies that financial planners and trust attorneys have been using for years to help families avoid paying estate taxes may now fall by the wayside.” That’s because the income tax exemption based on estate size just doubled, from $11 million to $22 million. By way of comparison, 20 years ago the estate limit for income tax exemption was just $600,000.

One underlying concern expressed by some financial planners in the Wealth Advisor article is that the new tax law may lull many retirees into a false sense of security.  Those with estates worth less than $22 million – which is just about everybody – “will not need to bother with things like credit-bypass trusts, qualified terminable interest property trusts and many life insurance trusts,” says the article. “But that does not mean trusts will fade away and that all estate planning can just cease.”  Or as one financial planner puts it, “Now that they don’t need to pay tax, we worry they won’t do the things they need to do.” Another planner said that the number of well-to-do retirees lacking even the most basic financial planning documents – such as healthcare proxies and updated beneficiary forms on life insurance policies and 401(k) accounts – is “staggering.”

So far, so good, we say, but the underlying fallacy in the article, in our view, is in its misplaced priorities. “The most important parts of the process have to do with your financial health while you are still alive,” says Wealth Advisor, and also “about keeping control over your assets even after you die.” But what’s missing is any sense of comprehensive planning for how you really want to live, especially in retirement. That “missing link” is what makes this article, in the words of Rajiv Nagaich, “more traditional retirement advice that, in large part, misses the mark.”

“What do you really want to accomplish in life?” asks Rajiv. “That’s the kind of question that ought to be part of comprehensive retirement planning. No one I have ever spoken with or counseled about retirement has dreamed of dying with the most cash in the bank that they’ve ever had – after all, what’s the point in that? No, what most people really worry about is to avoid becoming a burden to those they love. They want to avoid being forced into institutional care against their wishes. They want to protect their assets.  A financial plan all by itself will never answer the ‘life questions’ that really matter!”

The Wealth Advisor article is just one of a recent batch of articles that dwell on finances to the exclusion of all else. Another example is this similar article on the website NextAvenue. It’s called “Five Questions to Ask Your Estate Planner after the New Tax Law,” and it seems to us like more of the same. The questions are all the ones you would expect, specifically:

  • Will the new federal law affect my estate tax picture?
  • What does the new tax law mean by the exemption limit for married couples?
  • Will the new federal law affect my state estate tax?
  • Are my estate documents customized to fulfill my wishes and avoid unintended consequences?
  • How soon should I come in for another review of my estate plan?

These questions are fine, as far as they go, but that’s the problem: in our opinion, they don’t go far enough.

At AgingOptions, we take a much different and far more holistic view of planning for your retirement. Planning for your financial future goes hand in hand with preparing a solid legal framework that will protect you and your family. What about your housing choices – are they consistent with your finances, your future health and your personal preferences? Have you considered all the issues and options that revolve around medical insurance coverage? And is your family fully informed of your wishes – and fully supportive? Finance, legal, housing, medical and family are the “five facets” of retirement that are encompassed in an AgingOptions LifePlan. If you’re intrigued by this approach, why not join Rajiv Nagaich to explore more about his winning retirement philosophy? Come to an AgingOptions LifePlanning Seminar at a location that is convenient for you. You can find details by clicking here – then register online or call us during the week. It will be our pleasure to show you “the rest of the story” when it comes to retirement planning.

(originally reported at

Need assistance planning for your successful retirement? Give us a call! 1.877.762.4464

Learn how 70% of retirement plan fails and find out how you can avoid this

Find out more about LifePlanning

Your Cart is empty!

It looks like you haven't added any items to your cart yet.

Browse Products
Powered by Caddy
Skip to content