Many individuals have invested heavily in their employers’ 401(k) retirement plans, but this is not always as much of an advantage as one might hope. A 2015 California Supreme court decision shed light on the issue after a utility company was successfully sued by its employees for failing to properly represent the nature of the plan.
Specifically, the court ruled (and unanimously, at that) that an employer must act in its employees’ best interests when creating and operating a retirement plan. It seems that the plan they offered carried high fees to participate that undid much of the investment opportunities the employees were counting on.
If your estate planning includes a company retirement plan, be sure to consult with an experienced attorney about the actual efficacy of the plan itself, and to ensure that you truly understand the costs of participation. Although most companies who may have taken advantage of employees through a retirement plan have shifted course in light of recent costly lawsuits, you can never be too careful with planning for retirement and beyond.
Ultimately, you want to make wise choices that allow you to live comfortably later in life and provide for the ones you love after you pass. A well-crafted estate plan helps to synthesize all of the pieces of your financial life together to help ensure that your retirement and eventual death do not trigger unnecessary fines or taxes, and that planning begins now. To truly make the most of all your opportunities, an experienced estate planning attorney can provide more information.
Source: Pilot Online, “Keep an eye on the effectiveness of your employee 401(k) plans,” James Lange, April 24, 2017