Tax season is the close of the prior financial year -- and a good time to begin estate planning if you’ve been putting it off year after year.

The idea of estate planning is not pleasant, but who plans on becoming ill, incapacitated or worse? Some time and energy spent now will spare your loved ones from added stress in case the unexpected happens -- during a time that is already difficult enough.

It’s also important not to underestimate the potential disputes that could arise if plans for your estate is not specified. Remarriage, stepchildren, business ownership and property ownership are all situations that can complicate dissolution of your estate -- in ways you may never anticipate. These days, you don't have to be a millionaire for disputes to arise. Without proper estate planning, those you love may face costly legal challenges to the benefits you would have wanted them to receive.

One of the questions we are often asked about estate planning is who does what -- what is our role as an accountants, what does an attorney do and what about your investment advisor? And do you really need to pay a team of individuals now for an event you hope will be 20 or 30 years from now -- or longer?

For everyone, estate planning involves a few basic steps that are largely in an attorney’s domain -- you should have a will distributing your estate upon death, a living will stating your preferences regarding resuscitation and incapacitation, and designate legal authority (power of attorney) to someone if you are ever unable to make decisions on your own.

An attorney’s role in estate planning is to gather facts about your personal wishes and how you want possessions and assets distributed after your death. The attorney then drafts the necessary legal documents to carry out your plan.

If you have any significant assets -- a home, a business or investments -- it is strongly advisable that you consult with us regarding potential tax consequences to your beneficiaries. If you have sufficient assets, you may need to consider tools such as revocable living trusts, charitable trusts and annuities, qualified and nonqualified retirement plans, life insurance and other instruments to preserve your assets for your loved ones and beneficiaries. You may also want to make special provisions within those instruments.

Your financial planner would be involved if there is a need to set up new investment vehicles to help preserve your assets.

Estate planning may or may not be complicated -- that will be based on your personal situation. On the other hand, the more complex your situation is, the more important estate planning becomes -- and the more reason you should do it now.

Give us a call and set up an appointment. We can begin advising you on what to consider, and arrange an introduction to a competent estate attorney.

“Live every day as if it were your last, because one of these days, it will be.”

These articles are intended to provide resources for the tax and accounting needs of small businesses and individuals. The information contained in this Website is intended to provide general information on matters of interest in the areas of tax and accounting. Users are encouraged to contact us regarding specific situations.