You may have heard that the Social Security Administration officially announced that Social Security recipients will receive a 1.6% cost-of-living (COLA) adjustment for 2020. Those increased payments will start in January 2020. The purpose of the COLA is to help the purchasing power of Social Security benefits keep pace with inflation. Congress first enacted the COLA provision as part of the 1972 Social Security Amendments, with automatic annual COLAs began in 1975. Before that, benefits were increased only when Congress enacted special legislation.
Atlanta Financial Blog
Writing a will or trust is strictly for legal tasks, such as naming your executor/trustee, beneficiaries of your property, and guardian for your children. As you think about your estate plan, you may find that you also want to:
- Explain why you are giving property to certain beneficiaries and not others
- Explain disparities between bequests or gifts
- Express positive sentiments about a beneficiary or negative sentiments about a disinherited heir
- Leave instructions for your digital legacy
- Leave statement about your personal experiences, value, or beliefs
Using an Explanatory Letter
Although these sentiments are encouraged, they should not be included within the text of your will or trust, because adding general information, personal statements, or reasons for making or not making a bequest risks the possibility of producing a document with conflicting, confusing, or potentially even illegal provisions.
If it is important that you have a final say about personal matters without seriously risking your will’s integrity, we suggest that you write a letter to accompany your will expressing your thoughts to those who survived you. Because what you say in the letter will not have legal effect as part of your will, there is little danger that your expressions will tread upon the legal language of the will or cause other problems in the future. In fact, if your will is ambiguous, a judge make look to your letter to shed light on your intentions and to help clarify the will.
However, it is extremely important that the statements in your letter do not contradict the provisions in your will. Any contradictions could create interpretations problems after your death, which may lead to lawsuits and family turmoil.
Keeping these precautions in mind, writing a letter to your friends and family, explaining why you wrote your will as you did – and knowing they will read your reasoning at your death – may give you a great deal of peace of mind during your life. It may also assisting in explaining potential slights and hurt feelings of surviving friends and family members.
What to Include in Your Letter
What to include in your letter is completely up to you. It can be long or short, funny or intense, verbose or succinct. Below are some ideas of you might want to include:
- An explanation as to why certain gifts were made to particular beneficiaries. You may also want to explain why a particular piece of personal property was gifted to that particular beneficiary.
- Positive or negative sentiments. This is your time to “have the last word.”
- An explanation about disparities in gifts, including why you left more to one person and less to another.
- A statement in support or in opposition of a controversial issue.
Here at Atlanta Financial, we are dedicated to making life’s journey richer for you and your family. Call me at 678-282-0296 for a complimentary consultation as part of our Second Opinion service.
The holidays are the perfect time to express our thanks for your business and to think about those less fortunate. Please join us for our 11th Annual Holiday Open House and Toys for Tots Collection on Thursday, December 12, 2019, 11:30 am – 1:30 pm at our office – 5901-B Peachtree Dunwoody Road, Suite 275, Atlanta, GA 30328. Lunch will be served.
All of us at Atlanta Financial want to congratulate Harrison Fant on recently passing his five year anniversary at Atlanta Financial in September. Since joining AFA in 2014, Harrison has rapidly ascended through the different positions to his current position as Wealth Manager. Harrison has a unique combination of technical financial planning skills and the ability to present those complex concepts in easily understandable ways to all of his clients.
In working with my retired or soon-to-be retired clients, perhaps the most frequent question I am asked is “What is the best way to withdraw from my investment and retirement accounts in retirement in order to provide me my desired retirement income?” I believe they ask me this question because many of them have investments in a mix of different accounts with varying tax characteristics such as taxable investment accounts, IRAs, 401k or retirement plan accounts, Roth IRAs, and possibly real estate investments such as rental property. In addition to that, they may also have retirement income coming in from multiple sources and at different times such as Social Security income, pension income, and deferred compensation. If you are interested in increasing what you can spend in retirement and reducing the impact taxes have on your retirement nest egg, it is important to have a multi-year retirement income plan that takes into account the impact taxes will have on both your retirement income sources, and the withdrawals you take from your different investment and retirement accounts.