Personal Finance (Not Investing) • The reasons for having money outside tax-deferred

You've made a good list and thought out things well.
Yes. Beware the subsidy cliff, it can put a huge dent in your finances especially if a health care and health perfect storm should happen, including loss of work and income.

Yes. Estate planning. Have you met with estate planning attorneys?

For myself: (only) having had very substantial amounts in "non tax advantaged space" gave me a lot of flexibility in the retirement transition phase and in retirement. Able to quickly respond to large financial needs made for a lot less stress.
j

I see comments like talking to an estate attorney pretty regularly on this forum and I don’t understand why? Maybe if someone is wealthy enough to be above the federal estate tax limit of $13.61 million, why bother? Especially if one’s wealth is solely in index funds plus house and the kids inherit everything. Am I missing something?

it might be the "boglehead nature" to be thorough and deliberate about financials and all related tangents, and consulting with all professionals to "cover one's bases", knowing that while one might be an expert in one area, it is not the carry over to all areas

Investment finance in life and retirement is comprehensive to all areas of life, family, et al. And, some think, should be approached with that in mind leaving nothing to chance.

And, when it comes to estate planning for oneself and loved one's, the importance of it is not proportional to the dollar amounts.

There are many perspectives when it comes to integrating all of these aspects because everyone is unique in needs and concerns.
j

You said a lot there, but no specifics, just generalizations. Honestly though, for the average boglehead whose assets are mostly index funds, I just don't understand how an estate attorney will make splitting those assets amongst the adult children better or less complicated. All I see is added complexity, fees, and little benefit which is why I ask. What actual benefit does an estate attorney add to such a family? The way I see it, write a will, state in it where the money is going and that is it? What else is there?

I just dealt with someone's estate upon death. They had a will. It was followed as written. Done. What else am I missing? Maybe someone else can chime in who has experience with an estate attorney. I ask because I don't know what I don't know and can potentially learn something.

I can understand maybe an estate over $13.61 million wanting some assistance in minimizing estate taxes. I can understand also wanting a trust if a minor is involved.

Estate planning is often planning for the unexpected. You expect you and your spouse, children and beneficiaries will die in a certain sequence. You expect kids will be normal and productive and if they get married they stay married. If all that happens then perhaps TODs / beneficiaries work just fine.

It is when those things don’t go as planned when having an estate plan makes a difference. People die unexpectedly. People become disabled. People get divorced. People become addicted or ill. People get in accidents and/or get sued. People go bankrupt, etc etc.

Statistics: Posted by EnjoyIt — Thu Jul 11, 2024 10:44 am — Replies 44 — Views 5390