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Cummins Inc Employees: 10 Estate Planning Mistakes That Can Derail Your Legacy

'For Cummins Inc employees, reviewing your estate plan every few years is essential to keep pace with evolving family needs, tax law changes, and shifting financial priorities.' — Paul Bergeron, a representative of The Retirement Group, a division of Wealth Enhancement.

'Cummins Inc employees who revisit their estate plans regularly are better positioned to adapt to tax law changes and life transitions that could otherwise disrupt long-term goals.' — Tyson Mavar, a representative of The Retirement Group, a division of Wealth Enhancement.

In this article, we will discuss:

How changing life circumstances and tax laws may impact the effectiveness of your current estate plan.
Key estate planning components—such as trustees, health care directives, and trust structures—that may need to be updated.
Practical steps for Cummins Inc employees to keep their estate plans aligned with long-term financial and family goals.

Many individuals draft an estate plan—including health care directives, powers of attorney, trusts, and wills—and then set it aside for years. However, life circumstances, tax laws, and legal frameworks often shift over time. For Cummins Inc employees managing long-term financial objectives, revisiting an estate plan every three to five years—or after major changes—helps keep the plan aligned with current needs.

Ten Signs Your Estate Plan May Be Outdated

1. Executors and Trustees: Are They Still Suited for the Role?

Executors and trustees carry major legal responsibilities, such as handling assets, filing tax returns, distributing funds, and acting on behalf of beneficiaries. These appointments may have been made under circumstances that no longer apply.

- An executor may now be unable to serve due to health, relocation, or passing.
- Professionals named in the plan may have retired or exited the industry.
- Corporate fiduciaries may have undergone mergers or changes in structure.
- Adult children listed as successors may now have other obligations or limitations.

Cummins Inc employees may benefit from re-evaluating each fiduciary’s availability, financial awareness, and overall relationship with the family.

2. Trusts for Children: Have They Aged Well?

Trusts are often structured for minor children, outlining distribution ages and guardianship roles. But over time:

- Guardianship provisions may be unnecessary if children are now financially independent.
- Distributions set for age 25, 30, or 35 may have occurred or require adjustment.
- Direct distributions might expose funds to potential claims in divorce or lawsuits.
- Children’s maturity, spending patterns, or marital status may differ from earlier expectations.
- Beneficiary designations on insurance or retirement plans may now conflict with trust goals.

- It’s worth assessing whether trust terms and retirement designations continue to reflect intended outcomes.

3. Health Care Proxies and HIPAA Authorizations

- If HIPAA authorizations are outdated, health care agents may be blocked from accessing vital medical information.

- Without authorization, hospitals may limit updates or exclude family from treatment discussions.
- Delays can affect treatment decisions and family coordination.

Cummins Inc employees should verify that HIPAA documents are up to date—and that adult children, particularly those living independently, have health care directives of their own.

4. Growing Wealth and the Estate Tax Landscape

As of 2025, the federal estate and gift tax exemption is $13.99 million per individual and $27.98 million for couples. The annual gift tax exclusion is $19,000 per recipient.

However:

- These elevated exemptions are temporary and expected to sunset in 2026.
- Trust formulas created under prior laws may no longer be suitable.

Cummins Inc executives nearing the exemption limit may want to speak with advisors about reviewing their gift strategies and trust funding formulas.

5. State Residency and Legal Nuances

Estate laws differ significantly by state:

- Some states assess estate or inheritance taxes at lower thresholds than federal law.
- Community property vs. common law distinctions can change how assets are divided.

If a Cummins Inc employee has changed residency since creating their plan, a legal review may be warranted to enhance compliance with current state laws, particularly in states with unique estate tax structures like Massachusetts, Oregon, Washington, or Minnesota.

6. Portability and Credit Shelter Trusts

A surviving spouse may use any unused federal exemption from the deceased spouse through portability, but:

- A federal estate tax return is required within nine months of death (15 months with extension).
- Before portability, credit shelter trusts (CSTs) were common to preserve exemptions.

- Although no longer needed for federal purposes in some cases, CSTs may still be helpful for managing state or generation-skipping transfer (GST) taxes. Disclaimers and updates to trust structures may provide additional flexibility.

7. Charitable Giving: Aligning Purpose with Planning

Charitable giving is often a priority—but sometimes not reflected in estate documents. Potential planning tools include:

- Specific gifts to charities listed in a will or trust.
- Use of charitable lead or remainder trusts.
- Donor-advised funds or private family foundations.

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Cummins Inc retirees who value philanthropy should evaluate how well their estate plans incorporate these goals, and whether doing so could lead to tax advantages.

8. Estate Taxes vs. Income Tax Implications

Earlier estate plans emphasized reducing estate taxes, but income tax considerations are now equally important.

- The federal estate tax rate is 40%.
- Federal income tax rates can reach 37%, capital gains up to 20%, plus a 3.8% surtax.
- Trusts reach the highest tax brackets with just $15,650 in income.

- It may be beneficial to shift income-producing assets out of trusts or re-evaluate distributions to individuals in lower tax brackets.

9. Life Insurance: Still a Strong Fit?

Life insurance policies created years ago may no longer align with your estate or cost objectives.

Consider:

- Does the policy still perform competitively under current conditions?
- Are premium costs sustainable?
- Is it worth transferring ownership to an irrevocable life insurance trust (ILIT)?

It’s recommended that insurance policies be reviewed periodically to determine their ongoing relevance and financial impact.

10. Communication and Digital Organization

Many estate plans lack practical execution details. Family may not know where documents are stored. Fiduciaries might not have contact details or asset lists. Digital accounts and passwords may be inaccessible.

A comprehensive letter of instruction should include:

- Contacts for attorneys, advisors, and fiduciaries.
- An inventory of assets and their locations.
- Login details for important digital accounts.

Clear planning and information access can simplify responsibilities and reduce confusion during transitions.

Bottom Line: Estate Planning Is a Process, Not a Product

As your circumstances and regulations evolve, estate documents should evolve as well. Cummins Inc employees may consider:

- Revisiting documents every 3–5 years or after major changes.

- Involving attorneys, tax professionals, and financial advisors in reviews.

- Reassessing roles, ownership structures, and beneficiary choices.
- Including charitable goals and multi-generational intentions.

An estate plan should reflect your values and help facilitate your legacy.

Checklist: Key Areas to Review

Focus Area	Action Point
Fiduciaries	Confirm that trustees and executors are still appropriate.
Trusts and beneficiaries	Reassess terms, ages, and children's evolving needs.
Health care and HIPAA	Confirm that documents and authorizations are up to date.
Tax exposure	Compare current asset values with federal and state limits.
State of residence	Ensure estate documents align with state-specific rules.
Trust structures	Evaluate GST, CST, and disclaimer trusts for relevance.
Charitable giving	Review charitable gifts or plans embedded in documents.
Income vs. estate taxes	Assess tax impact by ownership type and beneficiary structure.
Life insurance	Re-evaluate life insurance policies for ongoing usefulness.
Communication plan	Share critical info with fiduciaries and heirs.

Legacy Planning in a Changing World

A plan drafted years ago may no longer reflect your current priorities. Keeping it updated allows for better alignment with family dynamics, tax laws, and economic trends.

Recent data indicates many individuals in their 60s fall into the 'senior sandwich generation,' simultaneously supporting aging parents and adult children. This multi-generational responsibility may require adjustments in estate planning such as modifying liquidity goals, rethinking timelines for inheritance, or creating structures that serve multiple generations.

Final Thought

An estate plan left unchanged is like using an outdated map—it may miss important updates such as new fiduciary considerations, revised tax laws, or shifts in your family’s structure. For Cummins Inc employees focused on long-term planning, periodic updates can help your legacy reflect today’s realities.

With consistent reviews and collaboration with qualified professionals, your estate documents can remain an effective and adaptable guide for your family and financial future.

Sources:

1. Doc & Law. The Connection Between Estate Planning and Retirement Planning. Doc & Law LLP, May 2025, pp. 1–3.

2. JustVanilla: Why You Need to Periodically Update Your Estate Plan (and the Consequences If You Don’t). JustVanilla, Mar. 2025, pp. 2–4.

3. Lanza, John R., and John E. Lanza. Why Revisiting Your Estate Plan Upon Retirement Is Crucial. Lanza & Lanza LLP, 25 July 2024, pp. 1–5.

4. Allegro, Alex. “Estate Planning Steps to Protect Your Loved Ones and Legacy.” Kiplinger , 9 June 2025, pp. 2–4.

5. Kiplinger Staff. “Think a Repeal of the Estate Tax Wouldn’t Affect You? Wrong.” Kiplinger , May 2025, pp. 1–3.

How does Cummins determine eligibility for participation in the Cummins Pension Plan, and what are the implications for employees who temporarily leave the workforce? This inquiry should delve into the specific criteria that define an eligible employee, such as citizenship requirements and exclusions, as well as the continuation of benefits and service credit during approved leaves or breaks in service at Cummins. It would also explore the complexities surrounding vesting and how service prior to a break is credited upon re-employment at Cummins.

Eligibility and Participation in the Cummins Pension Plan: Eligibility for the Cummins Pension Plan requires being an active employee, not participating in another Cummins defined benefit pension plan, and meeting certain citizenship or residency criteria. During approved leaves of absence, employees continue to accrue service credits, ensuring continuous growth in their pension benefits. Notably, vesting occurs after three years of service, securing the employee's entitlement to pension benefits upon leaving the company. The plan handles breaks in service by allowing reemployment within 12 months to count towards vesting and benefit calculations, safeguarding employee benefits against temporary disruptions in their career with Cummins.

What are the potential benefits and limitations of the forms of distribution available under the Cummins Pension Plan, and how should employees prepare for their pension benefit election? This question requires an analysis of various forms of distributions, such as lump sums versus annuities, highlighting the financial implications of each choice, particularly in relation to the IRS rules for 2024 regarding tax treatment. Employees should also consider how their family structure (e.g., marital status, dependents) may influence their decisions when electing a distribution method.

Distribution Forms and Tax Considerations: The Cummins Pension Plan offers various distribution forms, including lump sums and annuities, each with distinct tax implications under IRS rules for 2024. Employees must consider their family structure and tax status when choosing a distribution form, as these factors influence the tax treatment and financial outcome of their pension benefits. The plan provides clear guidelines on these options, ensuring employees can make informed decisions that align with their personal and financial circumstances.

In what ways do pay credits and interest credits accrue within the Cummins Pension Plan, and how can employees gauge their potential retirement benefits over time? This question will focus on the specifics of how pay credits are calculated based on an employee's compensation and service at Cummins, as well as the impact of interest credits on the total account balance and long-term retirement planning. It will also examine how employees can track these credits through the Cummins retirement resources.

Accrual of Pay and Interest Credits: The pension benefits at Cummins accrue through pay credits based on compensation and service, along with interest credits. Employees can monitor their accumulating benefits through the Cummins retirement resources, offering transparency and planning advantages. This structured accrual method supports employees in projecting their future pension benefits and making informed decisions about their retirement timing and financial needs.

How does Cummins ensure compliance with ERISA and other regulatory standards in the management of the Cummins Pension Plan, and what rights do employees have under these regulations? This query should explore Cummins' obligations as a fiduciary in managing employee benefits and highlight the key rights of plan participants. The discussion should include access to plan documents, the process for filing claims, and the significance of ERISA protections for employees retired from Cummins.

Regulatory Compliance and Employee Rights: Cummins diligently adheres to ERISA standards in managing the pension plan, emphasizing fiduciary responsibility and ensuring participants' rights are upheld. Employees have rights to access plan documents, participate in claims and appeals processes, and are protected under ERISA from any plan-related discrimination. This regulatory compliance not only secures the integrity of their pension benefits but also reinforces the legal framework protecting participant rights.

What role does the Pension Benefit Guaranty Corporation (PBGC) play in safeguarding the retirement benefits of Cummins employees, and how does this affect the perception of the plan's reliability? This question would examine the insurance coverage provided by the PBGC, what types of benefits are guaranteed, and under what circumstances benefits may not be fully covered. Employees might analyze how this federal insurance impacts their confidence in the plan, especially in light of changing economic conditions.

Role of the Pension Benefit Guaranty Corporation (PBGC): The PBGC insures the pension benefits under the Cummins Plan, providing a safety net that enhances the reliability of these benefits. Employees covered by the plan can gain confidence in the security of their pensions, knowing that even in the face of potential plan termination, the PBGC guarantees the core benefits, subject to certain legal limits and conditions.

How does the Cummins Pension Plan interface with employees' Social Security benefits, and what should retirees consider when planning for a sustainable retirement income? This inquiry will look at the coordination of benefits under the Cummins plan with Social Security, examining how pension income might influence Social Security calculations. It would require discussions on the timing of retirement elections and how they align with Social Security claims.

Interaction with Social Security Benefits: The Cummins Pension Plan is designed to integrate smoothly with Social Security benefits, offering provisions that help plan participants optimize their total retirement income. Understanding this interaction allows employees to strategically plan their retirement age and benefit commencement, maximizing their financial stability in later life.

What are the specific procedures and deadlines that Cummins employees should follow to successfully elect a distribution from the Cummins Pension Plan upon retirement? This question will necessitate a detailed look at the steps involved in initiating a benefit distribution, including the importance of spousal consent, the timing of application submissions, and any documentation that may be required. Understanding these processes can significantly affect the financial outcomes for retirees.

Procedures and Deadlines for Electing Pension Distribution: The Cummins Pension Plan outlines specific procedures and deadlines for electing a distribution upon retirement, emphasizing the importance of timely and informed decision-making. By understanding these processes, employees can avoid delays and ensure that they receive their pension benefits in the manner that best suits their post-retirement financial plans.

What are the implications of choosing to defer pension benefits and how does the Cummins Plan accommodate employees who opt not to start their benefits at the normal retirement date? This inquiry could address the potential financial consequences of deferring benefits, including eligibility requirements for such deferral and how it aligns with IRS regulations. Employees should critically evaluate their financial situations and retirement goals, weighing the allure of continued employment against starting their retirement benefits sooner.

Deferring Pension Benefits: Employees at Cummins have the option to defer their pension benefits beyond the normal retirement date, which can influence the financial value of their benefits. The plan provides guidelines on how deferral impacts benefit calculations and distributions, assisting employees in making decisions that align with their long-term financial goals.

How can Cummins employees designating beneficiaries ensure that their wishes are respected concerning death benefits, particularly in light of recent changes in the pension landscape? This question focuses on the options available to employees for designating beneficiaries, the process for updating these designations over time, and the specific forms that need to be completed to ensure compliance with the Cummins Pension Plan. It will also discuss the impact of state and federal laws on these designations.

Designating Beneficiaries and Ensuring Compliance: The plan stipulates clear processes for designating beneficiaries for pension benefits, ensuring that employees' wishes are respected and legally documented. This is crucial for planning and securing financial provisions for survivors, reflecting the plan's comprehensive approach to retirement benefits.

How can Cummins employees contact the Cummins Retirement Benefits Service Center to obtain more information about the Cummins Pension Plan and related retirement processes? This question emphasizes the various channels through which employees can reach out to the service center, the types of queries they can address regarding the Cummins Pension Plan, and the resources available online to assist with pension-related inquiries. Employees are encouraged to take advantage of these resources to make informed decisions regarding their retirement planning.

Accessing Information and Assistance: Cummins provides multiple channels for employees to access information and assistance regarding their pension plan, including online resources and a dedicated service center. This accessibility ensures that employees can obtain detailed information and personalized support, enabling them to navigate their pension benefits effectively.