IRS issues updated limits for retirement plan savings

Check out the release here.

The skinny:

  1.   401(k), 403(b), most 457 plans, and the federal government’s Thrift Savings Plan is increased from $18,500 to $19,000
  2.   IRA contributions increased from $5,500 to $6,000, plus $1,000 catch-up contributions for individuals over age 50.

Who is on your team?

When I meet a new client, I like to ask who her advisors are – accountant, insurance agent and financial advisor. Why? Because that’s who makes up that client’s team. Teams can work wonders for clients, which reminds me of a song from a show my girls watched a long time ago:

Here are some reasons I like teamwork:

  • Advisors know a lot about their clients. Sometimes clients don’t share enough information for me to give good advice.
  • Advisors are trained differently. That results in different ideas and/or perspectives that get better and more customized solutions for our clients.
  • We can learn from each other, which benefits current and future clients. I surely do not know everything, so I am happy to learn something new from others!
  • Planning will be coordinated. What good is a Trust that is intended to hold life insurance if the insurance beneficiary form is not updated?

By the way, you are welcome for the song – I hope that you are signing it all day!  🙂








Do you own assets with someone?

A very important part of the estate planning process involves titling of assets. Sometimes we will get lulled into a false sense of security that our planning will go as we intend because we “have a Will.” Believe me, I am glad when clients come in with a Will already in place. However, that is not the end of the story.

Wills govern assets that are subject to probate. Probate assets are individually owned assets with no beneficiary designation. They can also include jointly owned assets. Yes, that’s right – a jointly owned asset can pass through probate. But how?

I remember talking with someone who was encouraged to meet us through the nudging of their financial advisor. This individual told me that they really did not need to meet. After all, they had already done their planning and set up their accounts correctly. My first thought was why did their advisor, who is a really good advisor, want to waste all of our time with a meeting? I figured that could not have been the case, so we started to talk.

This individual was single and decided to add their children to their accounts. As they told me this, I knew exactly why the advisor suggested a meeting. Having children as “owners” on accounts is not ideal for liability reasons, but that is not the point of this blog post. It turns out that the accounts simply read “Father, son and daughter” on the title and nothing more.

Under Florida law, if two unmarried individuals own an account together, it is presumed to be owned as “tenants in common.” This means that when one individual dies, the account passes under that individual’s Last Will (and NOT to the other owner). This is PROBATE, which most of our clients want to avoid. This type of ownership can be corrected by adding “joint tenants with right of survivorship” or JTWROS after the names. Some financial institutions will do this automatically, some will not.

Florida law flips the presumption of titling if an account is owned by husband and wife. This would have survivorship applied automatically. If a married couple wanted to titling to be tenants in common, then the titling would need to state that.
Besides the titling of an account, one needs to consider if a beneficiary should be designated. Frankly, I usually would prefer to have a beneficiary on an account rather than a joint owner, especially if that owner/beneficiary is an adult child. A child would not be able to access the account during his parent’s lifetime, but would receive the account outside probate at death. This might avoid a child dipping into the till at the wrong time.

Of course, all of this is dependent on a person’s unique circumstances and should suggest that a thorough review of both estate planning documents AND titling be considered to make sure that your plan works as designed.