As you sit by the warm fire and look out the window at the snowfall — perhaps with a cup of hot cocoa — consider the following question: Are you really prepared for retirement?

Your trust is set up, your will is updated, and all of your retirement accounts are working just as you’d hoped. You know you have a steady stream of income for the rest of your life. What could possibly be left to worry about?

There might be one thing. When many people set up a trust or draft a will, they do it with the mindset of “today.” They look to pass on their assets to their children as though those children will be living their lives the same way as their parents.

But, more often than not, this won’t be the case. For me, I have a good 25–30 more years left on this earth, God willing. Today, my kids are in their 30s. When I pass on, my kids will likely be in their late 50s to early 60s. So, when I create a trust or draft a will, I have to consider where they will be when they’re in their 60s, not today.

Their world will one day be completely different than it is today. By the time you pass, your beneficiaries may be getting ready for retirement or paying college tuition for their kids. There are many factors to consider.

When we pass on our assets to our children or grandchildren, we want to make sure we aren’t putting them in a position of hardship by doing so. It’s something to look at from a legacy point of view.

Here’s a good example. A caller from the radio show came to us with
a question about his inheritance. He had just received a large sum of money and wanted to know how to defer this money. He didn’t want to receive it at that point in time.

Why? His kids were getting ready to go to college and the caller needed to fill out the federal income form. His kids had applied for grants based on the family’s previous income status.

As the new assets came into the fold, the gifter’s grandchildren would lose their grants. Tuition would have to be paid for by the family. Unfortunately, there was no provision set up to delay or hold off

the assets until a more suitable time, such as after the children had graduated from college.

In another instance, one client we’ve had for years came to us explaining that both of their sons were living on Social Security disability income. This was due to a hereditary disease running in the family.

We explored passing on the client’s assets to their two sons, but this came with its own set of challenges. If the client simply passed on these assets in full, their sons would have the Social Security benefits revoked. They needed to look for ways to pass on their assets in such a way to not increase their income to the point that the benefits were revoked. It took some careful planning, but things like this are possible.

These types of situations are common. I encourage you to look beyond your current scenario and into the future. Consider where your heirs
will be in five, 10, 20, or 30 years. It’s wonderful that we’ve been blessed with assets we can count on today. But part of being a good steward is also taking into account how these assets will affect those we pass them onto. We certainly don’t want to cause any unforeseen hardships!

It’s something to think about as you gather with your loved ones this holiday season. I hope you have a very merry Christmas!

–Gary Mattson