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What Role Does Retirement Play in Estate Planning in New York?

retirement estate planning new york

Retirement planning is the process of setting retirement income goals and taking steps to achieve these goals, whereas estate planning involves creating a plan for the transfer of the creator’s estate to their beneficiaries after death. It is extremely important that you create both an estate plan and a retirement plan. While your retirement plan will allow you to build a substantial corpus for your stress-free retirement life, a carefully designed estate plan will protect the interests of your loved ones. These two concepts are closely related, which is why many people seem to confuse them. For more information on the role a retirement plan will play in estate planning in New York, please read on, then contact an experienced Rockland County wills, trusts and estates attorney today. Here are the basics of retirement planning and estate planning in New York:

What is retirement planning?

When planning for retirement, the focus is on the creator of the plan. While one creates their retirement plan, they must focus on finding ways to ensure financial independence after they stop working. Without a retirement plan, many people find that they are unable to support themselves and end up being a burden to their loved ones. A retirement plan must account for years when the individual will have little to no income, especially since healthcare costs rise with age.

What is estate planning?

An individual’s estate consists of all the assets he or she controls or owns. An estate plan usually includes a will that provides specific instructions on how the individual wants their property divided among their beneficiaries and heirs. Additionally, individuals might create living trusts, which allow for the easy transfer of the trust creator or settlor’s assets while bypassing the often complex and expensive legal process of probate. A living trust agreement designates a trustee who holds legal possession of assets and property that flow into the trust. When an individual is creating their estate plan, they must consider setting up a trust that addresses important questions related to the management and distribution of assets in the event that the maker passes away or becomes physically or mentally incapacitated and lacks the capability of making important decisions, including those related to their treatment and health.

Should you have both a retirement plan and an estate plan in New York?

Yes, you should create both a retirement plan and an estate plan, because they often overlap, particularly in the following fields:

  • Beneficiary designations: Both involve reviewing and potentially updating your beneficiaries on life insurance, retirement plans and any pay-on-death designations.
  • Powers of attorneys: Both may involve you relying on others to handle your financial affairs and to make medical decisions when you can’t.

Speak with someone from The Lauterbach Law Firm if you have any further questions.

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