Posts Categorized: Tax

Why You Might Actually Owe Taxes in 2018

Like many taxpayers, if you’ve already filed your federal income taxes for 2018, you may be surprised to discover you’re not getting a refund this time.  If so, this was almost certainly due to the sweeping tax overhaul made by the 2017 Tax Cut and Jobs Act (TCJA). Since personal tax rates were lowered by READ MORE

Your 2018 Taxes – Get Started Now

While we are not yet at the end of the year, even though it is fast approaching, now is a great time to take a moment and start your year-end tax planning for 2018. It is particularly necessary this tax year because of the changes to the tax law that became effective in 2018. READ MORE

Before Agreeing to Serve as Trustee, Carefully Consider the Duties and Obligations Involved—Part 2

Being asked to serve as trustee can be a huge honor—but it’s also a major responsibility. Indeed, the job entails a wide array of complex duties, and trustees are both ethically and legally required to effectively execute those functions or face significant liability.

To this end, you should thoroughly understand exactly what your role as trustee requires before agreeing to accept the position. Last week, I highlighted three of a trustee’s primary functions, and here I continue with that list, starting with one of the most labor-intensive of all duties—managing and accounting for a trust’s assets. READ MORE

I Don’t Have Kids, So Why Do I Need Estate Planning? Part 2

Estate planning isn’t just about passing on your assets when you die. In fact, some of the most critical parts of planning have nothing to do with your money at all, but are aimed at protecting you while you’re still very much alive.

Even if, or maybe especially if, you don’t have kids, you need to do estate planning in order to name health care decisions-makers for yourself and provide instructions on how you want decisions made.

As with health-care decisions, if you become incapacitated and haven’t legally named someone to handle your finances while you’re unable to do so, the court will pick someone for you. The way to avoid this is by naming someone you trust to hold power of attorney for you in the event of your incapacity. READ MORE

Why Not Just Go on NoloⓇ and Create Your Own Estate Planning Documents Cheaply?

In almost all scenarios, do-it-yourself estate planning is risky and can become a costly substitute for comprehensive in-person planning with a professional legal advisor. Typically, these online programs and services have significant limitations when it comes to gathering information needed to properly craft an estate plan. This can result in crucial defects that, sadly, won’t become apparent until the situation becomes a legal and financial nightmare for your loved ones.

Creating your own estate plan without professional advice can also have unintended consequences. Bad or thoughtless documents can be invalid and/or useless when they are needed. READ MORE

Roth IRA Conversions After Tax Reform…Still a good idea?

Twenty years ago, the Roth IRA first became available to investors as a financial tool for their estate planning needs. These accounts have maintained their popularity because unlike their traditional IRA counterpart, a Roth IRA provides account owners tax-free income during retirement. In fact, many people chose to convert their traditional IRA or 401(k) plan into a Roth IRA to benefit from this long-term tax advantage. (Of course, there is a current tax bill that has to be considered when you make a conversion.) The recently enacted tax reform, however, has removed one helpful opportunity: the ability to recharacterize — or undo — a Roth IRA conversion.

You can think of these recharacterizations as a second-look at whether the conversion made financial sense. Now, this second-look that a recharacterization offered is closed, so a Roth IRA conversion is just a little riskier than is used to be. READ MORE

Five Surprisingly Common Planning Mistakes Many Baby Boomers are Making

Baby boomers – the first generation tasked with the responsibility of planning for and funding their golden years. This generation, which includes those born between 1946 and 1964, have entered and continue to enter into retirement. As they make this financial transition into retirement, many are learning that they have made some of the most typical retirement mistakes.

But, even if you’ve made a financial mistake or two, there’s still time to avoid these five surprisingly common planning mistakes baby boomers are making in droves: Mistake #1: Believing Estate Planning is Only for the Wealthy; Mistake #2: Checklist Mentality; Mistake #3: Not Completing Your Estate Planning Homework; Mistake #4: Leaving Out Little (And Not So Little) Things and Mistake #5: Not Preparing for Life Events & Emergencies. With my guidance, you will not make these common mistakes. READ MORE

Estate Planning Best Practices Gleaned From Famous Celebrity Deaths

Discussing death can be awkward, and many people would prefer just to ignore estate planning all together. However, ignoring—or even putting off—such planning can be a huge mistake, as these celebrity stories will highlight.

The next time one of your relatives tells you they don’t want to talk about estate planning, share these famous celebrities’ stories to get the conversation started. Such cautionary tales offer first-hand evidence of just how critical it is to engage in estate planning, even if it’s uncomfortable. READ MORE

After Tax Reform, Is Estate Planning Still Necessary?

The new tax legislation raises the federal estate tax exemption to $11.2 million for individuals and $22.4 million for couples. The increase means that an exceedingly small number of estates (only about 1,800, nationally) will have to worry about federal estate taxes in 2018. However, comprehensive estate planning does a lot more than guard against you owing federal estate taxes. Other than taxes, you and your family likely face a range of estate planning challenges. Even prior to the Tax Cuts and Jobs Act, relatively few Americans needed to worry about the estate tax. However, virtually everyone will face a number of other issues, such as incapacity, medical emergences and guardianship concerns and everyone will face death. Estate Planning is very important and I look forward to giving you the peace of mind you deserve. READ MORE

Organizing for Tax (and Estate Planning) Season

It’s the start of a new year, which means tax season—and this year’s April 17th IRS filing deadline—is just around the corner. Soon you’ll be receiving tax forms such as your W-2 or 1099s, and you’ll start thinking about the life events that could affect your taxes in various ways. This flurry of tax prep activity is the perfect opportunity to get your estate plan in order, too, and kill two birds with the proverbial stone. Why? Because as you run down your list of “tax prep” questions, you will find that your answers could also impact your estate plan. It’s a new year, and new possibilities are in the air. As long as you’re getting started on your taxes, take a few extra moments to get the ball rolling on your estate planning as well. By getting organized in this way, you’ll be well on your way to making 2018 an amazing year. READ MORE

Why a Spendthrift Trust Can Be a Great Solution for Your Heirs

Put simply, a spendthrift trust is for the benefit of someone who needs additional assistance managing or protecting his or her money. The spendthrift trust gives an independent trustee complete control and authority to make decisions on how the funds in the trust may be spent and what payments to or for the benefit of the beneficiary are necessary according to the trust document. Under a spendthrift trust, the beneficiary is prohibited from spending the money before he or she actually receives distributions. These restrictions prevent the beneficiary from squandering their entire interest or having it garnished by the beneficiary’s creditors. The trustee controls the assets in the trust, including managing and investing the funds, once the trust is made irrevocable. READ MORE

Planning for the Future (Without a Crystal Ball)

If you don’t yet have a will or trust, now is the time to explore getting one. If you have an “old” will or trust, now is the time to talk with me about whether you need an update. Modern families need modern estate planning solutions, and I am ready to help you create a flexible estate plan that works now, and will work in the future, even if the current tax laws change (even though no one has the proverbial crystal ball). READ MORE