Tax season is well underway and you may have already started the process of gathering your documents to file your taxes. As you prepare, however, are you thinking about your estate plan?
Successful estate planning revolves around leaving a legacy you are proud of. Understanding how taxes and estate planning can help you leave more money to achieve your goals is important. The April 15th filing deadline is quickly approaching, and we want to make sure you are aware of important estate planning considerations you may want to account for before filing your taxes. Let us share a few of these key factors with you.
Carefully consider uncompensated transfers. You may not know that uncompensated transfer can penalize you as a gift in the future, especially when it comes to long-term care planning. If you transfer any amount of money within the sixty-month window prior to needing long-term care without compensation, you may be disqualified for public benefits. Before you act, we encourage you to talk to your trusted estate planning attorney to discuss when the right time to make lifetime gifts is.
Make sure the gift recipient is responsible. Having the ability to shield that gift from federal estate taxes only goes so far. It is crucial that you ensure the person you are leaving your money to does not have any issues, such as bankruptcy, that would render him or her irresponsible to receive the gift without estate planning in place. It is through estate planning that you can take steps to protect the gift you are leaving to a loved one. Whether you are protecting a child who may have creditor issues or planning to leave enough money to pay for the college of your minor child, these are considerations to bring up with your estate planning attorney,
Update your estate plan. Above all, we encourage you to update your estate planning regularly to avoid running into any issues if the tax laws in our state or federally have changed. Even if our state’s tax laws remain unchanged, it is still a good idea to discuss any changes in your goals or needs with your estate planning attorney. This can help ensure both you and your loved ones are protected against future, unexpected circumstances.
We know that taxes can be a complicated topic, however, it is never too early to be prepared and always keep in mind your plan for the future. We know this article may raise more questions than it answers for you. If you need further guidance, do not wait to contact our office to schedule a meeting with attorney Alan Hougum.