Florida residents who are planning their estates can ensure that enough money is available for both their retirement fund and the legacy they wish to leave their children. However, given today's difficult economic times and increased life expectancy, many factors need to be considered when laying out estate planning goals.
Today's retirees and soon-to-be retirees face challenges their parents did not have. For previous generations, pension plans and benefits were enough to sustain lifestyles, but with the current low bond yields, flat stock returns and the highest unemployment rates in 30 years, today's older generation has been forced to dip into their retirement income.
According to a study by the National Endowment for Financial Education, 59 percent of parents either have provided or are providing financial support to their adult children who are over the typical school-going age. Surveyed by the Metlife Mature Market, parents across generations said they would help their children if they were suffering from a financial setback. Despite this finding, retirees also demonstrated a strong inclination toward enjoying their retirement.
Proper estate planning can help achieve a balance between financial needs during life and after death. Retirement income, college funding, replacement income and the financial needs of heirs all need to be considered when creating a successful plan. To that end, many Florida residents consider life insurance, setting up revocable and irrevocable trusts and taking a close look at business and personal accounts.
Additionally, estate owners can consider offering their children an intra-family loan, which can turn out to be a win-win situation for all involved. The children can pay a fair interest rate every month so that parents have a steady flow of money. However, it would be wise to keep in mind the possibility that the principal may never be repaid.
In these uncertain economic times, one thing is clear: Florida residents who have questions regarding their estate plans will want to consider all of the legal options for protecting assets and ensuring the well-being of future heirs and beneficiaries.
Source: Chicago Tribune, "How to Help Family Members Without Hurting Your Own finances: Family financial demands can pose a challenge in saving for retirement," Rachel Koning Beals, March 12, 2012