Regardless of their actual financial standing, job title and income, many Americans — and probably most federal civil servants — would identify themselves as middle class.
But if you look at what you’ve got and/or are building, lots of people are worth a lot more than they think! That’s the good news. The downside is you have to be dead for others to benefit. But that happens, ready or not, so more people are doing something about it now rather than leave it to the courts, relatives, the IRS, or the state to decide. The trick is figuring out what you’ve got — usually a pleasant surprise — and how you want it handled after you’ve gone.
What most people don’t know is how much they are worth. That’s especially true of someone who has worked a long time for Uncle Sam, has a sizable 401k plan (TSP) and who bought a house in the 80s, 90s or even more recently. And if married, stayed married. That covers lots of current federal workers, as well as many retirees or their survivors.
So how do you start your search for your estate? Let’s talk with Washington, D.C. area tax and estate attorney Tom O’Rourke. He worked for the IRS for many years and most of his clients are current or former civil servants, or are related to a fed. He’ll be my guest today, 10 a.m. ET, on today’s Your Turn show here, or on the radio in the Washington, D.C. area on 1500 am. If you can’t listen live, the show will be archived on our website so you can listen later, listen again or refer it to a friend.
Meantime here’s the checklist of things he says you should be doing, knowing or finding out, in your search for your estate:
1. Are my beneficiary designations up to date?
Important point which many people don’t know: Your beneficiary designations ALWAYS SUPERSEDES YOUR WILL. Some of your most valuable assets are controlled by beneficiary designations. When it comes to the Thrift Savings Plan, consider any adjustments to your investments, and also whether your TSP beneficiaries should receive your entire account balance in one lump sum.
There’s also Federal Employees’ Group Life Insurance (FEGLI) and other life insurance to consider, especially since your annuity, which may be worth more than $1 million. Do you really want to have one of your children’s names on your bank and investment accounts?
2. Is my will or trust up to date?
Do you want to keep the same beneficiaries, trustee or personal representative? Does their health permit them to handle the job? Are they in a geographically convenient location? Things and situations change. People get ill, or age. Has my net worth substantially increased or decreased? Are there any special concerns that need to be addressed?
Make sure you also consider minor children, handicapped children, spendthrift children, children going through a divorce or any children dealing with a substance abuse problem.
3. Do I have financial and medical directives in place?
Who is going to tell you if or when you should no longer be driving? Is your home conducive to your present needs? Should you give some thought to moving to a continuing care facility? Do you want to retain the same agent for financial matters? Do you want to retain the same agent for health care matters?
These are very important things to know, consider and check out or update. The idea is to know your estate, know the rules and now how it is to be divided up among relatives and loved ones which, sometimes, are not always the same people. But its your money — and your decision.
October is officially here, and at the end of the month folks will celebrate Halloween by dressing up in costumes of all varieties. But the origins of the dressing up tradition have a fittingly dark beginning. Hundreds of years ago, Oct. 31 marked the end of the year in the Celtic calendar and the beginning of Winter, an uncertain and scary time back then. During that dark time, it was believed ghosts returned to Earth, and to avoid being recognized by the ghosts, people wore masks when they left their homes — a custom now mostly tied to parties and trick-or-treating.