What federal employees need to know about estate planning, and why it’s important.
Welcome to part ten of our series of “listicles.” We’ll be going over 5 key points to remember for several areas of retirement planning and employee benefits for members of the Federal Workforce. The first nine topics we covered were FERS, CSRS, the TSP, FEHB, FEGLI, social security, tax planning, FLTCIP, and Survivor Benefits. Now we’ll be covering Estate Planning.
Attend our next no-cost webinar to learn more about estate planning for federal employees and retirees
1. Estate Planning for Federal Employees
Getting prepared for death is something a lot of people avoid like the plague. Especially in military circles, obtaining life insurance or setting up a will can be viewed as a jinx. But whether you’re an active-duty soldier in a warzone or a civilian fed working a desk job, getting an estate plan formulated can alleviate a lot of stress for your loved ones in the event of your death. Ed Zurndorfer, who covers estate planning topics for our site, is featured on a recent FEDLIFE podcast episode on estate planning for feds:
2. Proper Preparation
Frankly, it doesn’t matter what age you are or where you are in life – preparing your estate plan is smart idea that assists in both proper retirement planning and financial planning in general. Even if you’re not ready to meet with an estate attorney, giving a periodic glance at this quick checklist can be greatly beneficial to your loved ones should you pass away unexpectedly, or end up incapacitated and at the mercy of others’ care.
3. Incapacitation
Gathering an inventory, one’s assets and completing the following documents are recommended steps in prepping for a serious medical event. Should you become incapacitated, whether that means physically paralyzed, or your mental state has deteriorated, having these documents on-hand will make your family’s decision process easier in a time of crisis: a durable power of attorney for health care, a living will, HIPAA authorization, and a durable power of attorney for finances. For more information about the importance of these documents in the event of incapacitation, check out this article.
4. Post-Mortem
After one’s death, there are three documents that can determine who receives any inheritable assets: a will (specifically a last will and testament), a revocable trust (a living will), and an irrevocable trust. A last will and testament will entail an individual probate process, which can become costly, be less private, and take up a lot of time. A living will, or revocable trust, can help your survivors avoid this probate process. Lastly, an irrevocable trust cannot be changed once it is established and contains a life insurance component that can pay taxes due at death and other expenses related to settling one’s estate.
5. Beneficiaries and Guardianship
When planning one’s estate, the designation of beneficiaries and guardians for minor children can be two of the most impactful decisions. A designated beneficiary should be on file for a federal employee’s unpaid compensation (SF-1152), FEGLI death benefits (SF-2823), TSP account (completed online, formally TSP-3), and CSRS or FERS pension (SF 2808 or SF 3102). If you have children under the age of 18, having a formal document listing who should assume guardianship can help prevent an ugly custody battle in an already difficult time for your surviving children.
Next Steps
If you’d like to dive into more detail about estate planning for feds, check out this page. On that page, you can also register for the next Estate Planning webinar with Ed Zurndorfer. It’s never too early (or too late) to learn about your retirement benefits and start making a plan! For an even deeper dive into your retirement planning as a federal employee, check out our entire (no-cost) webinar series.
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Until Next Time,
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**Written by Benjamin Derge, Financial Planner, ChFEBC℠ The information has been obtained from sources considered reliable but we do not guarantee that the foregoing material is accurate or complete. Any opinions are those of Benjamin Derge and not necessarily those of RJFS or Raymond James. Links are being provided for information purposes only. Expressions of opinion are as of this date and are subject to change without notice. Raymond James is not affiliated with and does not endorse, authorize, or sponsor any of the listed websites or their respective sponsors.
