Federal Employee Estate Planning

Mar 5, 2025 | Estate Planning, Federal Employee

Key Takeaways

  • Update your beneficiary forms – They override your will and ensure your assets go to the right people.
  • Designate beneficiaries for your TSP account to avoid probate and streamline the inheritance process.
  • Weigh the benefits of partial or full survivor annuities to provide secure income for your spouse.
  • Keep organized records of your federal benefits to simplify the estate process for your heirs.

Protect Your Federal Benefits for Future Generations

As a federal employee, you’ve likely devoted years to carefully building your financial security. As you prepare to leave public service, you’re wondering how to seamlessly pass on your assets to your loved ones.

Federal employee estate planning can be more complex due to unique benefit structures. A well-thought out plan is crucial to ensuring your hard-earned benefits—such as your Thrift Savings Plan (TSP), Federal Employee Retirement System (FERS) pension, and life insurance—are passed on efficiently to your loved ones.

 

Beneficiary Designations: Avoid Common Mistakes

Beneficiary designations override instructions in a will, even for federal benefits like TSP accounts, life insurance, and survivor annuities. As such, one of the simplest yet most essential steps you can take is to regularly review your beneficiary designations. It’s crucial to ensure your beneficiary designations are up-to-date and reflect your current wishes after life events, such as marriage, divorce, or the birth of a child. Otherwise, you should plan to review all of your beneficiary designations at least every three years.

 

How to Handle a Thrift Savings Plan (TSP) Account After Death 

Your TSP account is a vital retirement resource and a significant part of your estate. Federal employees have unique rules for handling TSP accounts after death, and it’s important to plan for various scenarios in advance. Designating a primary and contingent beneficiary helps streamline the inheritance process and bypass probate, reducing the burden on loved ones. For spouses inheriting TSP funds, the option to retain the account in the TSP can provide tax deferral benefits, while non-spouse beneficiaries must generally transfer the funds to an inherited IRA, which has different tax implications. Talk with your tax preparer and financial advisor when making these decisions.

 

Maximize FERS Survivor Benefits

FERS survivor benefits offer valuable income protection for spouses and eligible family members. However, designating and planning survivor benefits requires thoughtful consideration. Be sure you understand options for partial or full survivor annuities when you elect survivor benefits and consider balancing the reduced retirement income during your lifetime versus the long-term financial security provided to your beneficiaries. You should also carefully coordinate these decisions with Social Security benefits and other retirement income sources to optimize the survivor benefit’s value.

 

Stay Organized to Streamline Federal Assets in Estate Plans

Simplify the inheritance process for your federal benefits by ensuring beneficiary designations, retirement accounts, and insurance benefits are well-organized will help your loved ones manage the estate. Consider consolidating information into a secure document that includes account details, benefit statements, and contact information for advisors or attorneys. This preparation can reduce stress for your family during difficult times and ensure that each benefit reaches your intended beneficiaries.

 

Why Work with a Chartered Federal Employee Benefits ConsultantSM?

Federal retirement benefits are exceptionally complicated, with multiple programs each governed by complex rules. Working with someone who knows the specifics of federal employee benefits can have a dramatic impact on your future.

Two of Cornerstone’s Wealth Advisors hold the Chartered Federal Employee Benefits ConsultantSM designation – Gordon Wollman, Cornerstone Founder and Raymond James Wealth Advisor, and Jill Mollner, Branch Manager and Raymond James Wealth Advisor. Their insight and specialized knowledge help ensure our team manages the unique needs of federal employees accurately and effectively.

 

How to Schedule a Consultation

Recent market movements remind us how uncertainty can impact financial security, not just in investments but in everyday life. Right now, many of our neighbors and friends in federal positions are facing unexpected job losses.

We know how overwhelming it can be to suddenly face a major financial decision about your benefits, pension, and future. You don’t have to figure this out alone.

If you or someone you know is a federal employee impacted by recent cuts, we’re offering complimentary, no-obligation financial consultations to help navigate this transition with confidence.

We’re here to listen, answer questions, and help you build a plan that provides clarity and stability.

📞 Call: 605-357-8553

📧 Email: cfsteam@mycfsgroup.com

The ChFEBCSM mark is the recognized standard of excellence for federal employees. Federal Seminars and ChFEBCSM, Inc. owns the symbol marks ChFEBCSM, Chartered Federal Employee Benefits ConsultantSM and ChFEBCSM logo in the U.S. Securities offered through Raymond James Financial Services, Inc. Member FINRA/SIPC. Investment advisory services are offered through Raymond James Financial Services Advisors, Inc. Cornerstone Financial Solutions Inc. is not a registered broker/dealer and is independent of Raymond James Financial Services. This material is being provided for informational purposes only and is not a complete description, nor is it a recommendation. Every investor’s situation is unique, and you should consider your investment goals, risk tolerance and time horizon before making any investment decision. No investment strategy can guarantee your objectives will be met. Raymond James and Cornerstone Financial are not affiliated with nor endorsed, authorized, or sponsored by, the United States government, the TSP, or FERS. Raymond James does not provide tax or legal advice.

Identity Theft and Taxes Protect Your Return From Tax-Related Identity Theft

Jan 15, 2025 | Estate Planning

What is Identity Theft?

Identity (ID) Theft is a fraud committed or attempted using the identifying information of another person without authority. ID Theft impacts 1 out of 5 people, occurs every 2 seconds, takes 9 minutes for fraudsters to access hacked information, and can now be committed electronically (via email or a smartphone) to gain access to personal information.

The smart device age has made our lives easier, but it’s also made us more vulnerable. Identity theft, once a distant threat requiring break-ins and dumpster dives, has become an ever-present concern thanks to digital ubiquity. With the prevalence of e-filing, that holds especially true during tax season. Last year, the IRS reported identifying 1.1 million potentially fraudulent filings by early March.

Cornerstone is proud of the work we do to keep your data safe and the additional layers of protection and support we offer through our association with Raymond James. However, taking individual steps to protect yourself and your data is critical.

 

Know the signs.

Whether it’s a letter concerning information you never requested or an alert that an online account was created in your name, getting unexpected communications from the IRS is usually the first warning sign of tax-related identity theft.

  • The IRS does not routinely email, make phone calls or communicate with individuals through social media.
  • Explore more red flags at irs.gov/newsroom/taxpayer-guide-to-identity-theft.

 

Keep safe.

Taking a more defensive approach to your online life is simpler than you might think.

  • Password managers, such as those built into browsers or dedicated apps like Bitwardenand 1Password, can help you generate stronger passwords, update them regularly, and keep them secure and encrypted in a single location.
  • Enable multifactor authentication across your accounts.
  • Stay current with software and operating system updates.
  • Audit your online footprint: Make a list of all the sites you’ve created a username and password for and deactivate unused social, shopping and nonessential accounts.

 

Take action.

  • File your taxes as early as possible – as soon as all the necessary forms arrive. This can help ensure a return is on its way before a bad actor even has the chance to attempt theft.
  • Enroll in the IRS’s identity protection PIN (IP PIN) program. The IP PIN is a unique six-digit number generated each year to protect the use of your Social Security number.  

 

If you have a reason to suspect you are the victim of tax-related identity theft, we encourage you to respond immediately to any IRS notices and visit IdentityTheft.gov for guidance on protecting yourself and securing accounts. If an e-filing is rejected because taxes have already been filed using your information, you may need to complete IRS Form 14309, Identity Theft Affidavit, and include it with a paper filing.

If you’d like to discuss additional security – or savings – get in touch any time.

Learn More

Identity theft resources from usa.gov

Recovering from identity theft (from ftc.gov)

Don’t miss our Education Event:

Beyong the Firewall: Privacy, Security, and Account Protection

Feb. 11 | 6:15pm | Hilton Garden Inn Sioux Falls South Or via Zoom

Hilton Garden Inn Sioux Falls South – 5300 S Grand Cir, Sioux Falls 57108

Register

Not a Cornerstone client? 

Contact us today at 605-351-8553 or cfsteam@mycfsgroup.com if you’d like to learn more about the unparalleled service you can expect from the Cornerstone team.

CSP #695994 Exp. 1.14.26

Sources: raymondjames.com, irs.gov, cnbc.com

Raymond James does not provide tax or legal services. Please discuss these matters with the appropriate professional. Material created by Raymond James for use by its advisors. The information has been obtained from sources considered to be reliable, but we do not guarantee that the foregoing material is accurate or complete.

The Family Meeting: Key to Protecting What Matters Most

Dec 31, 2024 | Estate Planning

If you think about family wealth, you might focus on tangible assets like investments or property. However, some of the most valuable aspects of a family’s legacy are intangible— things like traditions, shared values, and family history. These intangible elements, combined with material wealth, help define the legacy you’ll pass on to future generations. Ensuring that this legacy aligns with your personal goals and wishes is essential.

Preparing your children or other heirs for a successful financial future is key to ensuring that wealth continues to grow and benefit your family for generations. Equally important is creating a space for open, transparent conversations with your heirs, beneficiaries, or Power of Attorney, so they are equipped to make informed decisions should you become incapacitated. Estate planning isn’t just about preparing for what happens after you’re gone; it’s also about ensuring your affairs are managed according to your wishes if you can no longer do so yourself.

Holding a family meeting that includes your financial advisors can be a powerful way to help safeguard your family’s future. These meetings help ensure that your loved ones avoid unnecessary confusion and stress when it comes to managing the financial affairs of an incapacitated or deceased family member. While these conversations can be difficult, the alternative—leaving beneficiaries to navigate complex plans and assets without clear guidance—can be far more painful.

At Cornerstone Financial Solutions, we facilitate many family meetings for clients each year and have extensive experience in ensuring they are productive and meaningful. Introducing your heirs to your advisors also helps put faces to names and provides comfort, knowing there will be support in managing your estate when the time comes. With multiple generations of advisors on our team, we’ll be here for your family today and in the future.

We can host these meetings in our office, or we can arrange secure virtual sessions for families spread across the country. Whether or not you choose to include us in the conversation, we’re happy to provide the resources and space you need. There is no cost or obligation involved—only the confidence that comes with planning for the future.

Not a Cornerstone client?

If you’re ready to take the next step, we can help guide you through every step of the process. Contact us to plan a conversation that ensures clarity, confidence, and peace of mind for generations to come.

Contact us today at 605-351-8553 or cfsteam@mycfsgroup.com if you’d like to schedule an introductory strategy session.

CSP #635767 Exp.10.28.25

Any opinions are those of Cornerstone Financial Solutions, Inc. and not necessarily those of Raymond James. Expressions of opinion are as of this date and are subject to change without notice. There is no guarantee that these statements, opinions, or forecasts provided herin will prove to be correct. Investing involves risk and you may incur a profit or loss regardless of strategy selected, including asset allocation and diversification. Past performance is not indicative of future results.

In Case of Emergency: Organize Your Vital Info

Jul 16, 2024 | Estate Planning, Retirement Planning

Organize your vital personal, health, and financial information in one accessible place to help your loved ones navigate with ease should something happen to you.

Life can be unpredictable, and emergencies can happen when we least expect them. Think about this: if you have a medical emergency, could your loved ones access your phone? If your partner couldn’t talk, do you know their usernames and passwords? Does your family know the names of your doctor and important medical information? Could they easily find your IDs and legal documents?

Make sure your family doesn’t have to wade through piles of paperwork or argue about who will take care of the cat by having vital personal, health and financial information in a centralized and accessible place.  Here are some practical steps you can take:

Personal and Digital Connections

 

Compile a list of your usernames, passwords, and other login details in case someone needs to access your electronic devices or social media accounts. You can keep this information secure by using password management tools or a digital vault.

Create a list of essential personal and professional contacts who should be notified if you have an emergency or are incapacitated, including employers, attorneys, and financial advisors. Help make it easy for your family to reach out to your community of connections if needed.

Do you use an online financial aggregation service or app? A trusted contact will need to know how to access anything that is password protected.

Health and Medical Information

Who will advocate for your health needs during a medical emergency? Having quick access to your health information can be a lifesaver and help remove doubt and stress when handling difficult situations. Create a document with details about your primary healthcare providers, ongoing medical conditions, allergies, and any medications you’re currently taking.

Consider obtaining an advance directive to provide instructions for medical care if you become unable to make decisions. According to the Journal of Preventative Medicine only 26% of Americans have taken this important step.

Legal and Financial Documents

Ensure your important documents such as wills, trusts, advance directives, and power of attorney are in order and make sure a trusted person knows where to find all of this information. If you’re unable to manage your affairs for a period of time, your representative may need proof of ownership documents such as the deed to your house and vehicle titles or contracts such as sale of property.

Download the Important Documents Checklist

A simple tool we’ve created to help you organize your vital documents.

DOWNLOAD CHECKLIST

Not a Cornerstone client?

Will your loved ones have the information they need if something happens to you? Preparing involves organizing your personal, health, and financial information. The Cornerstone Experience® gives our clients access to our professional team and several online tools to help organize personal, health and financial information in a centralized and accessible place.

Contact us today at 605-357-8553 or cfsteam@mycfsgroup.com if you’d like to learn more about the unparalleled service you can expect from the Cornerstone team.

CSP #541388 Exp. 7.10.25

Protecting Your Legacy

Mar 18, 2024 | Estate Planning

Protecting Your Family and Your Legacy

When Pablo Picasso died in 1973 at the age of 91, he left behind five houses, cash, gold, bonds, and artwork. Because he didn’t have a will, it cost $30 million dollars and took six years for his assets to be divided among his heirs.

Unfortunately, Picasso wasn’t unusual in neglecting to plan for the inevitable. Many people don’t have a will, let alone an integrated plan designed to safeguard your estate, the people you love, and future generations.

AN ESTATE PLAN SERVES FOUR MAJOR PURPOSES:

  1. Directs who will receive your property when you die.
  2. Minimizes probate costs and any estate taxes that might be owed on that property.
  3. Provides for the care of minors – otherwise the state will become their guardians.
  4. Provides for your care if you are unable to provide for yourself. A proper plan ensures that you get to
    pick the caregivers, not the state.

People often find the first issue most critical – ensuring that your assets go to the people you choose.

    • Property you hold in joint tenancy with someone will go to that person, typically your spouse.
    • Beneficiaries named in your insurance policy, individual retirement accounts (IRA), or your qualified retirement
      plan at work will receive that property.
    • But, if you die intestate – without a will – your local probate court will decide who receives any property you
      hold solely in your name.

What if you want some of your property to go to friends, relatives, or children from a previous marriage?

For example, you want your friend Evelyn to get your teacup collection and son Jack to get your golf clubs. A will and letter of instructions can specify who receives what, so that your heirs aren’t left feuding over property.

Without a will and perhaps the use of a trust, your spouse could end up with everything. That may sound great, but your property could later end up in the hands of someone your spouse marries or their heirs, not in the hands of your friend or the children from your previous marriage.

What if you are widowed or divorced or want one child to receive the bulk of your property?

Perhaps you have a child who is disabled who you want to be sure is taken care of. Or maybe one child is a poor manager of money or is facing divorce. Without a will, many probate courts would distribute your assets equally to your heirs.

Without an estate plan, not only might the wrong heirs end up with your property, the federal and state government could end up with a good chunk of it. Whereas relatively simple trusts such as a bypass trust or an irrevocable life insurance trust can help shield the assets from taxes, or at least help pay the taxes with a minimum of cost.

Not convinced you have a large enough estate to worry about?

Think again. Many people think about the estate taxes when they think of an estate plan, and don’t draw one up because they don’t think they have an estate large enough to be taxed. But these days, with qualified retirement plans, IRAs, stock options, life insurance, and homes fluctuating in value, more and more families are finding themselves vulnerable to federal and state estate taxes. You can pass your property to your spouse tax-free, but that is only postponing the tax bite.
The government will collect when he or she dies.

We put off estate planning for any number of good reasons – we’re young and don’t think we need one yet, we don’t want to deal with something that means thinking about dying, we dread the thought of working with a lawyer, or we just don’t realize the impact of going without one. But it’s never too early to start a plan to help preserve, protect and transfer your assets to the people and organizations you care about.

NOT A CORNERSTONE CLIENT?

If you have questions about your financial plan please contact us today to schedule a complimentary, no obligation review with one of our advisors. Call 605.357.8553 or email cfsteam@mycfsgroup.com.

Raymond James and its advisors do not offer tax or legal advice. You should discuss any tax or legal matters with the appropriate professional.

Sources:
9 Famous People Who Died Without a Will, https://www.legalzoom.com/articles/10-famous-people-who-died-without-a-will
Will(ful) Neglect: Survey Reveals Nearly 60% of Americans Unprepared for the Inevitable, https://finance.yahoo.com/news/ful-neglect-survey-reveals-nearly-130400538

CSP #Insights Newsletter 415437, Insights Newsletter Issue 2 Feb 2024, Exp. 4.2.25