Charlie Jones is a partner in his accounting firm. He is 40 years old. Rita Jones is tenured as an Associate Professor at the local university and she is 36. They have two children: Carter, age 6, and London, age 3. They are not planning any more kids.
Charlie makes $100,000.00 per year and Linda makes $50,000.00. They have a new home worth $350,000.00 with a mortgage of $300,000.00. They took title as tenants by the entireties. They own two relatively new cars but owe car payments on both and both are jointly titled.
Charlie has $150,000.00 in his 401(k). Rita has $60,000.00 in her university defined contribution pension plan. Each spouse is the primary beneficiary of their retirement accounts. Charlie has a $500,000.00 life insurance policy and Rita is the primary beneficiary. There are no contingent beneficiaries.
Charlie and Rita have $25,000.00 in a money market account but otherwise have no other significant investments.
Charlie and Rita's parents are all alive and in good health and are financially sound. Charlie has a brother who continues to struggle with substance abuse issues and changes low paying jobs frequently. Rita has two sisters: one is in college and is an excellent student; the other is married with children and lives on a modest income. Everyone in the family is close.
Based on these facts:
(1) Discuss your ideas for Charlie and Rita’s estate plan.
(2) What documents would best suit them?
(3) What steps should they take to fill in any gaps?
(4) Should beneficiary designations be changed or added?
Explain your thought process for each question.