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9 Tax Prep Questions That Will Help Organize Your Estate Plan, Too

It's tax prep time!

It’s the start of a new year, which can only mean one thing: time to start your tax prep. This tax season comes with dramatic changes to the Internal Revenue Code, 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.

 

9 Tax Prep Questions that Impact Your Estate Plan

  1. Did you get married or divorced? Did any of your children or grandchildren?
  2. Did you welcome a child or grandchild into your family by birth or adoption?
  3. Have any of your children or grandchildren reached the age of majority?
  4. Have you dealt with illness or hospitalization? Have you incurred medical expenses?
  5. Did you buy or sell a new property or any other major assets, like a vacation home?
  6. Did you move to another state?
  7. Did you buy, sell, open, or close a business?
  8. Have you made any charitable donations?
  9. Do you have any new life insurance or pension plans?

After you’ve answered these questions, get to work on gathering the corresponding paperwork. That might include deeds, policies, and contracts as well as bills and receipts. Having all of this information on hand can help you prepare your tax forms and whip your estate plan into shape.

 

How Your Tax-Related Changes Can Affect Your Estate Planning


If you already have an estate plan
, your number one goal is to make sure everything still represents your wishes, taking into account the past year’s events. Maybe because of a change in circumstances, you need new or updated estate planning documents. Perhaps it’s time for an LLC and an update to your living trust now that you have a small business, or maybe you need to update beneficiaries because of births or deaths. Or, if you’ve had a change of heart about who should inherit from you, you also need to update your plan.

If you don’t have an estate plan, having this information at your fingertips sets you up for a productive conversation with your estate planning attorney. After reviewing your legacy goals, your lawyer can draw up key documents, such as:

  • A will. Among other things, this document can ensure that your wishes—and not the laws of the state—determine how to distribute your estate.
  • A revocable living trust. In addition to, or as an alternative to a will, you can establish a living trust, which allows your estate to bypass the potentially long and costly probate process upon your death, gives you extra privacy, and helps to avoid the potentially costly guardianship or conservatorship court process (sometimes called “living probate”) if you become incapacitated.
  • A living will. This document expresses your desires regarding life-sustaining medical treatment, if you become incapable of communicating your wishes.
  • A durable power of attorney. This appoints someone to step in and take over your financial affairs if you are unable to do so, reducing the possibility of hard feelings among loved ones or the need for court intervention.

To learn more about the basics of estate planning, click here.

It’s a new year, and new possibilities are in the air. As you get started on your tax prep, 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.

As Anne Burrell once observed, “Organizing ahead of time makes the work more enjoyable. Chefs cut up the onions and have the ingredients lined up ahead of time and have them ready to go. When everything is organized you can clean as you go and it makes everything so much easier and fun.”

 

Call McDonald Law Firm Today

Are you ready to develop a comprehensive estate plan designed to achieve your goals and protect your family? McDonald Law Firm can help! Call Andre O. McDonald today, a knowledgeable Howard County estate planning attorney at (443) 741-1088 to get started.

 

DISCLAIMER: THE INFORMATION POSTED ON THIS BLOG IS INTENDED FOR EDUCATIONAL PURPOSES ONLY AND IS NOT INTENDED TO CONVEY LEGAL OR TAX ADVICE.

 

 

Request a Consultation

For help with estate planning, special needs planning, elder law or Veteran's Pension Planning needs throughout Howard, Montgomery, Prince George’s, Anne Arundel, and Baltimore County; and Baltimore City, contact McDonald Law Firm, LLC.

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McDonald Law Firm, LLC

Columbia Office

10500 Little Patuxent Pkwy, #420
Columbia, MD 21044-3563

Bethesda Office:

(By Appointment Only)

7315 Wisconsin Avenue, Suite 800 West
Bethesda, MD 20814

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