by Emily Hechler 
Retirement is a major milestone many of us look forward to. It gives us time to travel, mingle with loved ones, and reflect on the accomplishments and challenges we’ve overcome. To make the most of our retirement income, it’s important to keep your money and identity safe. This can look like staying safe from fraud, creating a thorough will, and managing debt so your loved ones can inherit your assets, or estate planning for your retirement savings.
Here’s your guide to planning your estate and protecting your retirement savings.
Protect Your Retirement Savings from Fraud
Fraudsters don’t hesitate to go after people’s money, often targeting vulnerable individuals like retirees. Many retirees have accumulated savings over time, making them attractive targets for scammers. The best protection is understanding how these scams work. Once you recognize common tactics, you’re better equipped to stay safe. Below are some of the most common ways scammers try to access retirement savings.
Government Imposter Scams
Many retirees rely on benefits such as Social Security, Medicare, or veterans’ programs. It’s easy to find your name, address, phone number, and other personal information online. With this in mind, scammers can easily impersonate these government entities to try to get more personal information from you. This can quickly lead to identity theft.
To avoid government imposter scams, carefully check the source of the information. If you have questions, contact these entities directly using the information on their websites. This way, you can be sure that you contact a legitimate representative.
Romance Scams
Romance scams are common at any age, but older adults report the most financial loss from these scams. They know that those looking for love online are being vulnerable, so they take advantage of your good intentions. These relationships start to show red flags that prey on your trust and good intentions.
Around 70% of adults have financially assisted a loved one in times of need. Before giving money to a romantic partner, watch for warning signs that make you question whether their need is genuine. If you need help discerning the situation, consult a trusted friend or family member first.
Caregiver Scams
Unfortunately, not all caregivers can be trusted. Caregiver scams can usually fall into two main categories: relatives and hired care. Many aging adults rely on family members to assist with caregiving, bill payment, and estate management. Since this decision was likely based on years of trust, the caregiving relative doesn’t seem suspicious. However, those with ill intentions may withdraw more from your account than they need to pay your bills so they can pocket the rest. In some situations, they may manipulate your will to receive a larger inheritance later.
With scams involving hired care, it’s more difficult but not impossible for them to take your money. They may sneak into your purse or wallet to take cash or your credit card numbers. In other situations, they may slowly steal your property and belongings.
Caregiver scams can be financially and emotionally devastating. Having more than one family member involved in your care, whether they directly provide the care or not, can help monitor your accounts and belongings. Having multiple trusted individuals involved can make suspicious activity easier to identify and address.
Social Media Scams
Social media scammers are getting harder to catch, especially in the age of AI. Fraudsters can manipulate the appearance of a loved one to ask you for money. Usually, they ask for gift cards or unsecured money transfers like Venmo. This makes it nearly impossible for you to get your money back once you realize they weren’t who they said they were. In some situations, fake business representatives may offer to sell a product or service that fits your retirement lifestyle. The offer isn’t legitimate, and they take your money and never contact you again.
Before responding to unexpected messages, verify that the sender is legitimate. If an offer seems too good to be true, it probably is. When in doubt, ask a trusted friend or family member for a second opinion.
Investing Scams
Investing scams can be hard to catch, especially because most types of investing involves some risk. Finance Buzz created a list of the top 10 retirement investing scams which include promises of guaranteed returns, fake annuities, estate planning fraud, cryptocurrency scams, and more. Be especially cautious of anyone guaranteeing investment returns or pressuring you to act immediately.
By the time you retire, you’ve likely already spent years investing your money for this milestone. Whether you want a new perspective or need to receive the most retirement income possible, talk to a financial planner at Alltru. Our financial planners can help you get the most out of your retirement so you don’t have to trust con artists.
Stay Safe from Investing Scams
With your money and identity on the line, you must keep your information secure. Sign up for Premium Checking at Alltru including identity monitoring and recovery services.
Pass Along Your Assets, Not Your Debt
There’s a lot of fear around probate, especially when debt is involved. Many people worry about leaving debt behind or inheriting a loved one’s debt. In most cases, family members are not responsible for a deceased person’s debts, but there are exceptions. By understanding how your debt is handled after you die, you can make informed decisions now to protect your family later.
Probate 101
Probate is the process of verifying someone’s will after they die and executing its plan. An executor of the will is responsible for managing the process. If there is no executor, the court will appoint an administrator to handle the responsibility of settling debts and distributing the assets.
Regardless of whether or not someone had a will, probate is required. Probate isn’t always faster simply because a will exists. Even if the deceased has a living spouse, probate will still happen as loans and assets may only be under one of their names.
Your Estate Can Pay Off Debt
In probate, the deceased’s assets and debts are evaluated. Debts solely under their name will be paid using the assets. These can include credit cards, loans, medical bills, and taxes. Some debts may be treated differently depending on the type of debt and applicable laws.
After the lenders are paid in full, the remaining assets are distributed according to the will. As long as you have more assets than debt when you pass, your chosen beneficiaries will receive their inheritance.
Exceptions to Assets in Probate
Fortunately, retirement accounts including IRAs, 401(k)s, and 403(b), and life insurance usually don’t go through probate. As long as the accounts have a living beneficiary, these assets can skip probate and go directly to the recipient.
Remaining Debt After Your Estate
In the situation where someone’s loan balances outweigh their assets, the assets will be used to pay the loans back as much as possible. Even though there aren’t assets to pass to the beneficiaries, the beneficiaries aren’t responsible for paying back the difference in the debt either.
Exceptions to Remaining Debt
There are exceptions to passing along debt after you pass. If you were paying off a loan with a cosigner, such as a mortgage, the cosigner will be responsible for paying back the loan. In the lender’s eyes, the cosigner is still able to pay the loan, regardless of their other debt and income.
Avoid Passing Along Debt
There are three main ways that you can avoid passing your debt responsibility to others when you pass away. First, limit your cosigning. Even if you have great credit and you agree with the other signer that you are only signing to help them get approved, this is risky.
If you cosign on a loan, you can get Debt Protection with Life Plus from Alltru to financially protect your family if you were to pass. Many people use life insurance as part of their estate planning strategy to help surviving family members manage financial obligations. Since life insurance doesn’t have to go through probate, the recipient can quickly get their money and use the funds to pay back the cosigned loan.
Protect Your Loved Ones’ Futures
Probate can take time. It helps ensure your estate, debts, and will are handled properly while you can still do so. To help protect what you leave behind, try to keep debt in your name only when possible. If that’s not an option, consider debt protection or life insurance to help cover remaining balances so your family can receive your assets instead of your debt.
Bust Will and Probate Myths
Now that we’ve clarified the basics of wills and probate, there are still a few important points to cover. Understanding these details can help you better prepare your estate so your family can focus on grieving rather than dealing with financial complications.
Who Gets Your Assets if You Don’t Have a Will?
There are many reasons to write a will, but worrying about the state taking your assets doesn’t need to be one of them. If you die without a valid will, which is called being “intestate”, state law decides who inherits your assets. While this varies by state, typically the assets are given to your spouse and then children.
The only reason your assets will go to the state is if no relatives can be found to give your money to. To speed up the probate process, create a valid will that clearly outlines how your assets should be distributed.
How Long Does It Take to Go through Probate?
Most estates don’t take years to settle. The main delay is the state-required period that allows creditors to file claims. This window varies by state but it typically ranges from about three or four months up to a year after the notice is published. In Missouri, this is a little over six months.
How Much Does Probate Cost?
There are a lot of horror stories about the cost of probate eating up all the assets. In most situations, this doesn’t happen. If you live in a state where attorney fees can run high, make sure your executor knows that the fees usually aren’t fixed or required. Probate is meant to transfer the estate, not drain it in legal costs. The executor should choose a lawyer who charges a reasonable flat fee or hourly rate.
Do I Have to Leave Money to My Spouse?
Some couples choose to write a will and not leave each other a lot in assets. This is more common in situations involving separate finances or blended families. If you are certain about this decision, make sure you meet with a lawyer to write a will so your spouse doesn’t receive your assets by default.
Why is My Oldest Child the Executor of My Estate?
Being the oldest child doesn’t automatically give someone responsibility as the executor of a parent’s estate. If the will names an executor, the court will usually appoint that person unless there’s a strong reason not to, such as a disqualifying felony conviction or inability to serve. The executor can be any qualified individual you choose and does not need to be your oldest child. If there is no will, or the named executor can’t or won’t serve, the court will appoint someone else.
Plan Your Retirement Wisely
Planning for retirement means more than building savings. It also means protecting what you’ve worked hard for now and after you pass away. From staying alert to fraud, to understanding how debt and probate work, to putting a solid estate plan in place, each step helps reduce stress for you and your loved ones later on. Taking steps today to protect your assets and organize your estate can help provide greater financial security for your loved ones in the future. With the right preparation, you can move into retirement with greater confidence, security, and peace of mind.
