Your estate plan combines components of your future healthcare intentions, your goals for passing on assets to loved ones and your financial plan. Working with qualified professionals for each phase of this is extremely important for protecting your interests. One common thing overlooked by many people in the estate planning process is tax diversification.

The tax code is ever changing, and it is extremely important to think about how tax planning will influence you, especially for things like retirement income. This can include options like taking required minimum distributions from 401(k) plans and IRAs, which are considered tax advantaged accounts.

Your savings strategy now should prioritize diversification, which means thinking about three different groups of setting aside assets for retirement: tax free, tax later and tax now. How you break this down may require outside involvement from your estate planning professional, your CPA, and even your financial planner.

This may help you arrive at an appropriate budget for the future and help you decide which of these assets should be included in your estate plan.

If you wish to pass on particular assets to your loved ones, some of these may be included in your probate estate, but others, such as your retirement accounts may fall outside of your probate estate and may require filing a beneficiary designation form directly with that account management.

Need more support to determine how your estate, retirement, and tax planning all work together for the best interests of your future? Contact our Pasadena law office now.

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