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Citigroup Employees: Essential Estate Planning for Blended Households

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Citigroup employees in blended families must take proactive estate planning steps to prevent inheritance disputes, and Tyson Mavar of The Retirement Group, a division of Wealth Enhancement Group, emphasizes that trusts, prenuptial agreements, and clear communication are essential to ensuring assets are distributed according to their wishes.

Citigroup employees with blended families must take proactive steps to ensure their estate plans reflect their true intentions—without proper planning, unintended disinheritance and legal battles can arise,' says Tyson Mavar, a representative of The Retirement Group, a division of Wealth Enhancement Group. 'By leveraging trusts, clear beneficiary designations, and impartial executors, families can help protect their loved ones and prevent future conflicts.

In this article, we will discuss:

Key estate planning challenges faced by blended families – Understanding the risks of inequitable inheritance and legal disputes.

Strategies to ensure fair inheritance – Exploring trusts, wills, and other planning methods to protect all family members.

The role of legal tools such as prenuptial agreements and trusts – How these documents can help prevent conflicts and ensure financial security.

More and more Citigroup employees in the United States are now in relationships that include children from previous marriages. This blended family usually gets along quite fine until it comes time to put a will into action. There are, however, some issues that may arise at this point and cause a lot of emotional and financial loss to the family.

For married Citigroup couples with children, the normal practice in classic estate planning is to have all the assets go to the surviving spouse and then to the children. However, this is a big problem in blended families because the surviving spouse is not usually legally required to disburse stepchildren. This has often led to stepsiblings inheriting the entire inheritance while stepchildren are completely cut off, which has caused a lot of family tension and expensive legal battles.

The main issue can be described as follows: Minneapolis estate attorney Marya Robben from Lathrop GPM points out that “When the tie that binds dies, there is no need to get along.” Before the funeral, in one of her cases, the kids had thrown their stepmother out of the family house and changed the locks. But in other cases, adult children were shocked to discover that their parents had nothing left and that their new partner or husband had inherited everything. Robben notes, “There is no right for adult children to inherit.”

At least one in five opposite-sex couples in the United States who lived together in 2021 had at least one partner who had a child from a previous relationship, according to the U.S. Census Bureau data. Lawyers were able to attest to the fact that will contests are becoming more common among blended families despite the fact that there is no public information available on this issue.

The Importance of Advanced Estate Planning

It is crucial for Citigroup blended families to plan for the future so as to avoid problems in the future. Inequitable distribution of assets is a problem that cannot be solved without making some rather difficult decisions when there are children from previous marriages and new spouses.

Barbara and James Kurtz, who in 1995 established a joint trust to assist the children to equally inherit the residual assets of the trust at the death of the second parent, is a good example of this complexity. But when Barbara died in 2010, James was able to transfer all the assets to a new trust and name his son as the only beneficiary. The children who were disinherited by Barbara’s children argued that the assets should have been divided as required by the initial joint trust. Last year, the Michigan Court of Appeals ruled that James could not withdraw all the assets from the original trust and Barbara’s children were awarded the shares. The next step will be to establish in the upcoming trial which assets can be linked to the previous joint trust.

Lawyers recommend that more planning can prevent some of these risks. Caroline McKay, a senior wealth strategist at CIBC Private Wealth, explains that people may often feel that their children have not received their inheritance and, therefore, recommend that separate trusts be created outside of the main estate planning for the stepparent if the stepparent is close in age to the children. Another way of ensuring that children get their inheritance is to give them their inheritance while they are still alive or to leave them a certain amount of money or a certain percentage of the estate when you die. Some of Citigroup couples, however, have their biological children in the main estate plan while creating a separate trust for the new spouse and stepchildren.

The Role of Prenuptial Agreements

A prenuptial agreement is a crucial estate planning device along with wills or trusts for the Citigroup blended families. Divorced father Tom Normand, an estate planner, and Helen Pickle, a retired teacher, married later in life and signed a prenuptial agreement so that each of them could leave their own children their own property.

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The surviving spouse in Texas is entitled to one half of the community property and not the deceased’s separate property unless otherwise provided for. Most of the states permit the surviving spouse to take a certain portion of the inheritance, it could be one-third or one-half. Pickle wanted to leave her house to her children, so Normand had to give up his homestead exemption.

Some problems that may arise include: spouses are in charge of each other’s funerals and medical decisions and this can be a problem if the children have different ideas. In order to avoid these arguments, Normand, 83, and Pickle, 73, have made their funeral arrangements known. Bishop Rayford High Jr. and his ex-wife, Rev. Ann Normand, both in their 70s, also signed a prenuptial agreement to ensure that their respective children would receive their distinct inheritances.

How to Ensure That Different Inheritances

After remarrying Donald when she was in her 50s, the couple has five children. When the second spouse died, then the estate plan would have continued to the children and the surviving spouse would have taken everything first. But Schultz established a different trust for her biological children because her father wanted his inheritance to be passed on only to his lineage. This way, she was able to ensure that only her children would receive her father’s estate after her death and her husband was okay with it.

Choosing Trustees and Executors

It is very important in Citigroup blended families to choose the right executor or trustee. Retired estate planner Paul Hood advised that it may be better to appoint an independent person instead of a child or a relative on either side. This minimizes conflict and accusations of bias to some extent.

Selecting guardians was a difficult task for Cleveland couple Heather and Andy Hetchler who married with six children. They did not want to appear to be favoring one side or the other and as their children got older they named Heather’s brother as the successor trustee.

In Summary

It requires a lot of thought and quite often quite complex provisions in order to provide for an equal and conflict-free distribution of assets within the context of estate planning for Citigroup blended families. Inter-family trusts, prenuptial agreements, and impartial executors can help reduce the chances of inheritance conflicts and preserve family bonds. The idea is to predict such a problem and solve it prior to it occurring so that every member of the family is provided for and treated equally.

Research shows that lack of communication and complex planning make 70% of blended family estate plans fail to achieve the decedent’s intent. Stressed the importance of proactive and open estate planning in the context of a mixed family situation, it is possible to significantly reduce the conflict and make the transfer of assets far smoother by ensuring that everyone has clear, written-down instructions.

Sources:

Cunningham, James L. Jr. Estate Planning for Blended Families: Pitfalls and Solutions. CunninghamLegal, 2019. https://www.cunninghamlegal.com/estate-planning-for-blended-families-pitfalls-and-solutions/ .

Trust & Will. Tips and Advice on Estate Planning for Blended Families. Trust & Will, 2019. https://trustandwill.com/learn/estate-planning-for-blended-families .

RBC Wealth Management. Estate Planning for Blended Families: Four Tips on Getting It Right. RBC Wealth Management, 2023. https://www.rbcwealthmanagement.com/en-ca/insights/estate-planning-for-blended-families-4-tips-on-getting-it-right .

BMO Private Wealth. 5 Estate Planning Challenges for Blended Families (and How to Solve Them). BMO Private Wealth, 2023. https://privatewealth-insights.bmo.com/en/insights/estate-trust/5-estate-planning-challenges-for-blended-families-and-how-to-solve-them/ .

Engel, Anthony L. Estate Planning for Blended Families. Bessemer Trust, 2023. https://www.bessemertrust.com/insights/a-closer-look/estate-planning-for-blended-families .

What are the main eligibility criteria for participating in the Citigroup Pension Plan, and how can Citigroup employees ensure they meet these requirements throughout their employment? Furthermore, what implications does the merger of prior pension plans into the Citigroup Pension Plan have on the benefits for employees from acquired companies, and what steps should they take to understand how their previous service is credited under Citigroup?

Eligibility Criteria for Citigroup Pension Plan Participation: Employees hired before January 1, 2007, are eligible to participate in the Citigroup Pension Plan if they were employees of a Participating Employer. Employees hired after that date are generally not eligible to participate. Additionally, employees from acquired companies may have their prior service credited under Citigroup. It's important for these employees to review the plan's specific provisions or contact the Citi Pension Center to ensure accurate service credit(Citigroup_Pension_Plan_…).

How does the Citigroup Pension Plan address survivor benefits for employees who pass away before their pension benefits commence, and what steps must their beneficiaries take to claim these benefits? Additionally, how can employees ensure that their loved ones are adequately informed about the options available should they face this unfortunate event?

Survivor Benefits for Pre-Retirement Death: If an employee passes away before benefits commence, the surviving spouse may receive a lifetime annuity based on the account balance or opt for a lump sum. Employees should ensure that their beneficiaries are aware of these options and the process to claim benefits(Citigroup_Pension_Plan_…).

For Citigroup employees wanting to learn more about the pension plan's benefits and options available to them, what contact methods should they use? How does Citigroup facilitate communication regarding the pension plan, and what are the most efficient ways for employees to get their questions answered?

Contacting Citigroup for Pension Plan Inquiries: Employees can contact the Citi Pension Center by phone at 1-800-881-3938 for U.S. inquiries or use the online portal to access their pension details. These methods provide the most efficient way to get answers to any pension-related questions(Citigroup_Pension_Plan_…).

With the current political climate we are in it is important to keep up with current news and remain knowledgeable about your benefits.

Citigroup offers both a traditional defined benefit pension plan and a defined contribution 401(k) plan. The defined benefit plan provides retirement income based on years of service and final average pay. The 401(k) plan includes company matching contributions and various investment options such as target-date funds and mutual funds. Citigroup also provides financial planning resources and tools to help employees manage their retirement savings.

Citigroup is planning to cut 20,000 jobs as part of a major restructuring effort to streamline operations and save $2.5 billion. The bank is also focusing on international growth and simplifying its management structure from 13 layers to eight. Despite the layoffs, Citigroup continues to offer comprehensive retirement benefits, including 401(k) plans and health benefits. Understanding these benefits is important in today's political environment.

Citigroup grants RSUs that vest over several years, giving employees shares upon vesting. They also provide stock options, allowing employees to purchase shares at a set price.