Welcome back to the second part of our lessons in estate planning. Bret and I recently reviewed all of our clients’ estate plans and in doing so, we learned a lot from this exercise that could help you and your heirs.

If you haven’t listened to last week’s episode make sure to go back and listen–especially if you have stepchildren or blended families. In this episode, you’ll learn why you might want to disclaim some assets, how to specifically disinherit a child, and why it is so important to clearly state your medical wishes to all of your kids.

Outline of This Episode

  • [1:22] Why you may want to disclaim assets
  • [6:00] What to do if you want to specifically disinherit one of your children
  • [8:07] Common
  • [11:22] Make sure your medical wishes are clear to all your children
  • [13:53] Surprising things we learned from our clients

Are you sure your kids don’t want all your stuff?

Nobody likes to consider their own mortality. However, since everyone has a 100% chance of death, it is crucial to create and regularly review your estate planning documents to ensure that they accurately reflect your wishes.

While it may be true that your kids don’t want the majority of your stuff, you may be surprised by what they do want. Bret brings up an example about one of his siblings wanting the family cookie jar which caused him to realize that he was sentimentally attached to it too.

To prevent your kids from getting into relationship-damaging altercations, communicate with them and write it down in your will so that everyone is clear.

How to disinherit a child

Specifically disinheriting a child isn’t necessarily a negative thing. You may have one child that is already financially independent and therefore you may want to specifically leave more for the other ones. Whatever the reason for disinheriting a child, it is important to specifically recognize that child and that you knowingly aren’t leaving them anything in your will. By doing this, there will be fewer chances that the will is contested.

How disclaiming assets could save your heirs thousands in taxes

You probably already know how important it is to have primary and contingent beneficiaries, but you may not be aware of this tip.

If one spouse passes and the other already has more than enough assets to live on comfortably, they may want to disclaim themselves as the beneficiary on an inherited account. By doing so, the assets will go directly to the contingent beneficiaries without that spouse having to take RMDs and paying taxes in the higher singles tax bracket.

This could also further benefit your kids by spreading out the timeline that they have to take RMDs. Listen in to hear the details on how this strategy could work and who it would best work for.

You won’t want to miss out on the interesting lessons that Bret and I learned by reviewing our clients’ estate plans. After listening, get started on updating yours to help ensure you rest easy.

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