Estate planning involves a number of factors that need to be taken into consideration. One of the most important considerations is how your pension benefits will be handled upon your death.
A pension is a regular payment made to you for past services rendered, often after retirement or disability, when you are no longer earning a regular income from employment. Pensions are often provided to company employees, government employees, and members of labor unions. They are usually paid out on a deferred basis, which can provide tax advantages to both employers and retirees. Some pension plans also pay benefits to your survivors.
The Employee Retirement Income Securities Act (ERISA) requires that retirement plans have a survivor benefit which allows the spouse of a participant to receive vested benefits if the participant dies before retirement.
If you die after retirement and you are married, your spouse is also entitled to a portion of your pension. However, this usually reduces the monthly retirement payments you would have received if the benefits were to be paid just during your lifetime. Your spouse can agree to waive this survivor benefit protection. You may also be able to name another person as your beneficiary, such as a child.
Other Retirement Benefits
Other retirement benefits that require careful estate planning are:
- 401(k), employer-sponsored plans that enable employees to save in an account with the income tax on the deposits and interest deferred until they are withdrawn at retirement
- 403(b), which operate similarly to 401k plans, available to self-employed ministers and employees of non-profits, public education, and hospital organizations
- Profit sharing, incentive plans in which a share of a company’s profits are typically accumulated in a tax-deferred account until an employee retires or leaves the company
- IRA (individual retirement account), a worker’s personal account for which the deposits and interest are tax-deferred until they are withdrawn at retirement
- ESOP (employee stock ownership plan), in which employees are allocated shares of company securities
- PERS (public employee pension plan), provided to employees of federal, state, or local government
An estate planner in Kalamazoo or Grand Rapids can help you to navigate the decisions involved in setting up your estate to match your priorities and goals. Willis Law, Attorneys & Counselors, can provide you with an experienced estate planner in Grand Rapids and Kalamazoo.
To get skilled legal advice on your estate plan in Kalamazoo, Grand Rapids and Paw Paw from an experienced estate planning attorney, please contact Willis Law, Attorneys & Counselors, toll free at 866-473-5636, or submit our online email form. We serve all of West Michigan.
Grand Rapids Office
Kalamazoo Office
Paw Paw Office
