Turning Your HSA Into an Estate Planning Tool

In a prime example of how estate planning is an ever-evolving area of law, there are some articles published recently discussing how you can utilize a health savings account (“HSA”) for estate planning purposes. Why should you consider an HSA as an investment vehicle? Well, consider the fact that this type of account has a rather tempting trifecta of features: (1) tax-deductible contributions (2) tax-free growth (3) tax-free distributions. These features offer major income tax advantages, according to an article published by Steven Latterell on Lexology.com. Along with the financial benefits, there is the simple fact that more people are going to access HSAs since many employees participating in employer-provided health plans are being offered health plans with extremely high deductibles (anywhere in the range of $4,000 to $10,000). This means, as more people utilize HSAs, they could become a rather large asset in an individual’s investment portfolio. Why?...

19 January

0 Comments

Sticky

Digital Info Just as Important as Traditional Estate Planning Documents

Posted by Bobby Feisee

in Bobby's Blog

Having your proverbial “digital estate” in order is just as important in today’s society as having a well-drafted Durable Power of Attorney, Advanced Medical Directive, etc. If you pass away without a document providing your username and password to your online accounts, your loved ones may be prohibited from accessing those accounts, resulting in unnecessary delay and frustration in getting your assets distributed and online accounts closed. Only seven states have laws addressing online estate planning (including Virginia). However, that means 43 states have no laws or regulations regarding digital estate planning and allow the service contract between the deceased and the online company dictate who can access the decedent’s account. For example, let’s say you have an online checking or savings account. If you live in a state lacking any type of regulation for online estate planning, your loved one may be prevented from accessing the funds in that...

22 May

0 Comments

Sticky

Estate Planning Tip: Utilizing a Roth IRA to Stretch Out Tax Benefits

Posted by Bobby Feisee

in Bobby's Blog

A Roth IRA offers distinctive retirement-savings benefits since under current law, investments in this type of account can grow tax-deferred and withdrawals are tax-free. It also gives you the ability to avoid early distribution penalties on some withdrawals. If you have a significant balance in your IRA and don’t plan to tap that balance during your lifetime, you may want to consider converting your IRA to a Roth IRA since it can benefit your estate. How? Well, the contributions made to a Roth IRA have the potential to grow larger than it otherwise might under traditional distribution rules, which means you’re leaving more for your loved ones. Another major benefit is that your beneficiaries can make income-tax-free withdrawals during their lifetimes. There are some benefits to this IRA strategy, but it is not fail safe. A potential drawback to a Roth IRA is that the ability to contribute to this type...