Estate Planning Insights & Tips

Tax season is upon us. Those who are getting ready to file their tax returns may wonder whether this is the year they are chosen for an audit. Audits are generally not random. There are some red flags that can increase a taxpayer’s risk of a federal audit.

For example, the Internal Revenue Service (IRS) is more likely to audit:

An estate plan can ease the transfer of assets. This includes everything from a family home to less tangible assets, like stocks. Here are three examples for the best way to discuss the transfer of stocks:

• Example #1: Stockowner does not include stock in the estate plan or does not have an estate plan. The stock will likely transfer either to a surviving spouse or as directed by the beneficiary designation. Probate may be required if a beneficiary designation or transfer-on-death beneficiary is not listed. Probate is best avoided, as it is a costly, time consuming and public process.
• Example #2: Stocks as part of a retirement account. When the stock is part of the retirement account, the transfer is complete without taxation. If, however, an heir makes a withdrawal, income taxes may apply.
• Example #3: Stocks held within a trust. This answer is more complicated. The exact impact will depend on the details of the trust. If the stockowner set up the trust as a generation-skipping trust, the heir could owe capital gains taxes upon transfer.

Estate planning is not just for individuals and families with large estates. One of the most important documents to have in your estate plan is a will. Have you thought about getting a will but decided to do it later? Think again. Dying without a will creates serious repercussions for your loved ones.

Do you know the benefits of having a will?

Everyone needs and benefits from having a will. This is true for families with significant assets. It is just as true for new parents and single individuals who may just be starting their careers. Whoever you are, you will benefit from having a will.

Your personal New Year's resolutions may still be in full swing, or they may have disappeared a few weeks ago. Either way, your estate planning resolutions should still be on your mind if your goal is to protect your family and your assets.