February Ponderings and Musings -Act of Love: Share Your Estate Plans

By VWG Wealth Management on February 8, 2023

“The great use of life is to spend it for something that will outlast it.”

• William James

“No legacy is as rich as honesty.”

• William Shakespeare

  “Love isn’t something natural. Rather it requires discipline, concentration, patience, faith, and the overcoming of narcissism. It isn’t a feeling, it is a practice.”

• Eric Fromm

I’ve Created My Estate Plan, What’s Next?  – by Lynette Jones

This year you have likely (and hopefully!) followed your advisor’s advice and worked on your estate plan. Congratulations on completing this important step toward financial well-being!  However, you are not done yet.  This February, say “I love you” by getting your friends and family involved in your estate planning.  A conversation or a family meeting with your loved ones about their role in your estate plan is important but is often overlooked or avoided.  My own daughter did not want to speak about this subject.  After pushing for a “family sit down,” she now has a better understanding of our wishes, her role, and where she can find my “Green Notebook” of important contacts, phone numbers and accounts.   

The conversation is also an opportunity to go beyond the documents and location of assets.  You can reiterate your end-of-life wishes that are expressed in your Advanced Medical Directive, create a dialogue around the stewardship of family wealth, and let your loved ones know that you have carefully planned for the inevitable with the goal of lightening their burden.

Below are some final questions to ask yourself after you have created or amended wills, trusts and other planning documents:

• Do the individuals you have named as your Executor, Successor Trustee, Power of Attorney and Health Care Proxy know that they have been nominated to serve in those roles?  Do they understand what they will be required to do at your passing or if you became incapacitated?  Ideally you would have a conversation with your family members/friends before naming them in your estate planning documents, but if not, engage them now that the docs are signed.  
• Do those individuals know the location of your original documents?  Can they access those documents?  For example, if your original documents are held in your bank safety deposit box, is your executor listed as a signee on the box?  If not, the executor would not have access to the original will.
• Do the named individuals know the location of your various investment and bank accounts?  When my own father became ill, he informed me of his own “Green Notebook” and told me where to find it.  The notebook contained a listing of all their accounts, the name of the firm or bank that held the assets and who to contact at each institution.  In addition, the notebook included information on life insurance policies, house bills etc.   I found this information invaluable as I had to assume my Power of Attorney duties.  Please make sure that your Executor, Successor Trustee, Financial Power of Attorney has your VWG Advisors’ contact information!
• Have you made a listing of your “digital presence”?  Do you bank online, pay bills online, have a Facebook account etc.?  Keep these logons and passwords stored securely so your Executor, Successor Trustee and Power of Attorney can access this information when needed.
• If you have established a Revocable Living Trust, have you re-titled your bank and investment accounts into the name of the Trust to avoid probate?  VWG can work with you to re-title your investment accounts and your estate planning attorney can re-title your residence and any second homes/vacation properties into the name of your Trust.
  • One of the most important benefits of establishing a Living Trust is to avoid probate which can save your Executor time and avoid the hassle of going through the court monitored probate process.  If assets remain in your individual name at death, then those assets are not governed by the language in your Trust, and they will be subject to probate.
• Have you checked your beneficiary designations to make sure they are coordinated with your new or updated estate plan?

SECURE Act 2.0 Highlights:

Key Provisions May Impact Your Financial & Retirement Planning

As school and work adjourned for the holidays in late December, some of Congress’ most substantial efforts of the year were underway as its members sought to pass a 2023 fiscal year spending bill. Ultimately, they succeeded, with a $1.7 trillion package being signed into law by President Biden on December 27. Among other measures, the legislation contains the Setting Every Community Up for Retirement Enhancement (SECURE) Act 2.0, a group of retirement reforms intended to expand and increase retirement savings.  

The Act, which builds on prior legislation passed in 2019, includes a wide range of provisions to help both older and younger workers, including further increasing the age at which required minimum distributions (RMDs) must be made and enabling employers to “match” student loan payments with retirement plan contributions. Here are some highlights of the SECURE Act 2.0 provisions to note and review with your VWG financial advisor as you plan for 2023 and beyond.  Click here for more details as some of these provisions are complicated and have exceptions.

Changes to Contributions

• Larger catch-up contributions:
  • In 2023, the employer-sponsored retirement plan catch-up contribution limit for those age 50 and older is $7,500. In 2025, for retirement savers ages 60-63, the catch-up contribution limit will increase to the greater of $10,000 a year, or 50% more than the regular catch-up amount to their workplace plans. 
  • Beginning in 2024, the current $1,000 catch-up contribution limit for IRAs will be indexed to inflation, meaning it may increase every year, based on cost-of-living adjustments.
• Roth matches: Beginning this year, employer-sponsored plans can provide plan participants the option to receive matching contributions on a Roth (after-tax) basis. Under previous law, matching in employer-sponsored plans was allowed only on a pre-tax basis. 

Changes to Required Minimum Distributions (RMDs)

• Ability to wait: Beginning this year,the age at which retirement account owners must begin taking RMDs increases to 73 and will increase to 75 starting in 2033. Please note that this applies only to those who had not yet turned 72 as of year-end 2022.  If you turned 72 in 2022 or earlier, you must continue taking RMDs as scheduled.
• Roth accounts exempt: Beginning in 2024, Roth accounts in employer retirement plans will no longer be subject to RMD requirements.
• Penalties reduced: Beginning this year, 2023, the penalty for not taking an RMD will decrease from 50% to 25% of the RMD amount not taken, and to 10% in certain instances when the situation is rectified promptly.

Changes Particularly Relevant to Younger Individuals Making It Easier to Save

• Student loan payment matches: Beginning in 2024, employers can “match” employee student loan payments with matching payments to a retirement account.  This enables retirement saving among employees who may otherwise refrain as they pay off their student loan debt.
• Leftover 529 plan rollovers: Beginning in 2024, beneficiaries of 529 college savings accounts will be allowed to roll over up to $35,000 over their lifetime, from any 529 account in their name to their Roth IRA.  This will help alleviate concerns that unused funds remaining in 529 accounts will be “trapped.” This should encourage greater savings for both education and retirement.  Please note that these rollovers are subject to Roth IRA annual contributions limits and that the 529 account must have ben open for more than 15 years.

Charitable Distributions

• Qualified charitable distribution (QCD) expansion: Starting this year, as part of their QCD limit, individuals age 70 ½ and older may make a one-time, $50,000 distribution to charities through charitable gift annuities, charitable remainder unitrusts and charitable remainder annuity trusts.  This amount counts toward your RMD, if applicable.
• QCD increase: Beginning this year, the annual IRA charitable distribution limit of $100,000 will be indexed for inflation, meaning it may increase every year, based on cost-of-living adjustments.

Preparing for Tax Filing Season

Once again tax filing season is upon us.  Many astute professionals now view tax management and filings to be a perpetual and not a seasonal task.  Regardless of how you see it, Federal taxes for 2022 must be filed by Tuesday, April 18th.  Below are some tips to help guide you through this year’s tax season:

• DO NOT file your taxes before the first week of April.
• 2022 tax returns and payments for most individuals are due April 18, 2023, because of a weekend and Emancipation Day, a Washington, D.C. holiday.  The extension due date for individual returns is Oct 16th.
• If you have uncertainty on any specific items, strongly consider filing for an extension with the IRS.
• Make sure to consult with your tax advisor.
• File your returns electronically, including direct deposit information for any refunds due, and avoid IRS processing and mail delays.

• The frequency and sophistication of cybercrime continues to rise.  We encourage all clients to add “Protect Myself and my Family Against Cyber Crime” to your list of 2023 New Year’s resolutions, starting with enabling multifactor authentication to your online email, banking and social media accounts.  Here are 7 Practices to Protect Against Cyber Crime to help get you started.  
• If you are hacked or think you are a victim of fraud or identity theft on any platform (banking, credit card, social media), even if outside your VWG accounts, please call us immediately.
• Each week VWG posts timely articles to our blog, VWG Makes Cents.  This month we have posted the following:
  • Making the Most of Your Financial Success After Your Retire
  • Understanding Sale Structures and Their Tax Implications
  • Options for Charitable Giving

• You can follow VWG on social media to hear market news and financial planning tips more frequently.  Click here to follow us on Facebook, Twitter and LinkedIn.

Happy Valentine’s Day!

Valentine’s Day is just 1 (albeit a very special day for us romantics) out of 365 days in which we can practice acts of love, care and compassion for our partners, family, friends and even strangers.  Taking responsibility for our own financial affairs, retirement planning, and the handling of our affairs after life are also acts of love and compassion when they are done well!  VWG is honored to be able to play a part.

We wish you a wonderful Valentine’s Day connecting with those you love.

VWG Wealth Management

A Hightower Company

Suzanne, Ashley, Lynette, Michelle, Rashmi, Kay, Ona, Brandi, Justin, Ryan, Ryan, Ryan, Patricia, Elana, Susan, Marnie, John, Rick and Jeff

Who we are

VWG Wealth Management is a team of investment professionals registered with Hightower Securities, LLC, member FINRA and SIPC, and with Hightower Advisors, LLC, a registered investment advisor with the SEC.  Securities are offered through Hightower Securities, LLC; advisory services are offered through HighTower Advisors, LLC.

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The information provided has been obtained from sources not associated with Hightower or its associates. All data and other information referenced herein are from sources believed to be reliable, although its accuracy or completeness cannot be guaranteed. Any opinions, news, research, analyses, prices, or other information contained in this report is provided as general market commentary, it does not constitute investment advice. VWG Wealth Management and Hightower shall not in any way be liable for claims, and make no expressed or implied representations or warranties as to the accuracy or completeness of the data and other information, or for statements or errors contained in or omissions from the obtained data and information referenced herein. The data and information are provided as of the date referenced. Such data and information are subject to change without notice.

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This document was created for informational purposes only; the opinions expressed are solely those of VWG Wealth Management, and do not represent those of Hightower Advisors, LLC, or any of its affiliates.

The2019 Financial Times 300 Top Registered Investment Advisors is an independent listing produced by the Financial Times (June, 2019). The FT 300 is based on data gathered from RIA firms, regulatory disclosures, and the FT’s research. As identified by the FT, the listing reflected each practice’s performance in six primary areas, including assets under management, asset growth, compliance record, years in existence, credentials and accessibility. Neither the RIA firms nor their employees pay a fee to The Financial Times in exchange for inclusion in the FT 300.