Who’s On Your Financial “A Team”?

By: Estate and Elder Law Services

If you were having heart surgery, you would undoubtedly want a strong team. A skilled cardiac surgeon, modern and cutting edge medical equipment, an experienced anesthesiologist, and caregivers to help you thrive during your recovery.

While you will hopefully never need to rely on a team for heart surgery, you will need to rely on a team of professionals to guide you through financial matters as you age. Who do you count on to advise you regarding finances, taxes and your legacy?

A true “A Team” will include an accountant, a financial planner, and an elder law attorney.

You rely on your accountant to guide you through decisions so you pay the least amount of tax possible during your lifetime. Your financial advisor will help you invest your assets to earn that income, which you will live on and enjoy during your lifetime. Your attorney will draft the documents to protect those assets, and will also strive to minimize the impact of income and estate taxes that could be due upon your passing. Your attorney will also make sure that the assets pass to your family members in the most ideal way possible.

Income tax planning has become a huge consideration when drafting an estate plan, as laws are likely changing with regard to capital gains and basis calculations. When an asset increases in value, it appreciates. If you buy stock for $100, and sell it for $1000, you have enjoyed $900 of appreciation. The IRS and your state taxing service will regard that appreciation as capital gain, and will tax the appreciation.

However, there are different taxation rules if you sell the asset during your lifetime, or if you wait to sell it after your pass away. The rules regarding these convoluted issues are very specific, and you should rely on your advisors to help you make the best decisions possible.This is especially true if you have assets that have appreciated significantly during your lifetime.

Additionally, beneficiaries of retirement assets can enjoy great income tax savings if they are able to stretch out the required minimum payments associated with qualified assets. Specifically, if you leave your IRA or 401(k) to your child when you pass away, he will be able to allow that asset to continue to grow tax free, and while he will be required to take annual required minimum distributions, those distributions can be spread out based on his life expectancy. This means that the account has years to continue to grow with significant income tax savings. This great opportunity can be missed if the right advisors are not in place to guide beneficiaries through the settlement process after you pass away.

A strong team works together to coordinate each of their respective skills and strengths to create the best possible outcome. Doesn’t it make sense for your advisors to come together to create a plan that will be an ideal fit for your assets and goals? At Estate and Elder Law Services, the attorneys will coordinate with your financial planner and your accountant to make sure that your team is working as strongly as possible. If you do not have an accountant or financial planner, we can give you names of people in the community who can provide outstanding services. In fact, in most instances, as part of the fee you will pay us for your estate planning, we will arrange for a meeting with your advisors and your family if you wish.

Call Estate and Elder Law Services today to make us a part of your “A Team”.