We met with the client and both children to review how the estate assets would be distributed and what to expect next. We completed spousal rollovers for the decedent’s IRA and Roth accounts. We moved taxable assets to an individual account with a Transfer-on-Death feature that will avoid probate and distribute them to the children at the client’s death.
Each retirement account named the children as 50/50 beneficiaries per stirpes* so that the grandchildren will benefit from the client’s legacy should the parent predecease. We reviewed the multiple annuities and life insurance policies the couple had on file to determine how best to utilize them. We recommended that the client annuitize a small annuity to deplete it in the next two years before she needs to file as a single taxpayer at a much higher rate.
We also recommended that she keep the proceeds of a small life insurance policy in the custodian’s total control account, earning 3%. The funds would stay liquid and earn a higher rate than if she moved them to a regular bank account. As the client worked through getting the house titled in her name, we recommended that once finalized, she put a Ladybird deed on the house to her children to avoid probate.
* Per Stirpes stipulates that if a beneficiary predeceases the testator, the beneficiary’s share of the inheritance will go to their heirs.
