Tax Time Can Also Be Estate Planning Time


One of the best times to review your estate plan, or to get one if you do not already have one, is when you are doing your yearly taxes.

Even if you have the assistance of an accountant, filing your income tax return can be a time-consuming and frustrating process. Most people want to get it over as quickly as possible. However, it is actually an excellent time to extend the burden a little bit and do some estate planning.

Think about it. While doing your taxes you will be gathering much of the same documentation needed to review an estate plan. In addition, the documentation will be fresh in your mind.

Accounting Web recently offered some tips about estate planning during the tax season in "Estate Planning Reminders for This Tax Season."

The advice includes:

  • Review or Get a Will – Spend a little time to review your will and make sure everything is up to date. If you do not already have a will, visit with an estate planning attorney about getting one.
  • Prepare a Letter of Instruction – Make a list of your assets, where they are located, and how they should be handled in your estate.
  • Review Beneficiaries – Since you should have the asset documentation available as part of your tax preparation, make sure all beneficiary designations are up to date.
  • Consider a Trust – Again since you already have the documentation handy, tax time is a good time to have a trust drawn up and to transfer assets into the trust.
  • Beware Free Lunches – Many shady companies like to offer free seminars on estate planning or retirement planning around tax season. They know people tend to worry about their finances at tax time. Often these seminars offer a free lunch. Usually, these are nothing more than heavy-handed sales pitches and you should avoid them.

Tax time is a great time to introduce your tax preparer and your estate planning attorney, so all of the bases are covered each year.

Reference: Accounting Web (Feb. 8, 2016) "Estate Planning Reminders for This Tax Season."

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