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19 Nov 2022
Anything, Estate Planning, News, Retirement, Tax Credits, Tax Law Pearson & Co, PC 0 comment

OPPORTUNITY TO ACCELERATE YOUR RETIREMENT SAVINGS

401(k) and IRA Contribution Limits Increased

 

Contribution limits for 401(k)s, 403(b)s, 457(b)s, IRAs, Roth IRAs, HSAs, FSAs, SIMPLE IRAs, and SEP-IRAs are all indexed to inflation. While the contribution limits don’t go up every year, you will generally see an increased contribution every year or two.

The inflation rate is now running at a 40-year high. That triggered the IRS to announce significant jumps in allowed contributions for tax year 2023. More specifically:

  • Taxpayers under age 50 can contribute to their 401(k), 403(b), most 457 and the federal government’s Thrift Savings Plan accounts … increases to $22,500 for 2023 … a $2,000 bump over 2022 limits.
  • Notably, taxpayers 50 and older win a further concession … a $3,000 boost to $30,000 annually. That number includes a $7,500 so-called catch-up contribution, up from $6,500 in 2022.

Participants in qualifying plans can reduce their 2023 tax bill by
increasing the amount they contribute pre-tax to retirement accounts.

Here’s a summary of the key provisions of the changes for 2023.

401(k) Plans – Annual Contribution Limits

  • Employees under age 50 – $22,500, up $2,000 from 2022.
  • Employees 50 and older – $30,000 (Includes $7,500 catch-up contribution, up from $6,500)
  • If the Plan permits, additional after-tax employee contributions may be made to top-out the total employer/employee contribution limits – employees under age 50, $66,000; 50 and older, $73,500.

IRA – Annual Contribution Limits

  • Increased to $6,500 from $6,000
  • Participants 50 and older can make an additional $1,000 catch-up contribution.

Note: You can’t make a tax-deductible contribution to an IRA unless you have no workplace retirement plan, or your income is below certain limits. For 2023, the deduction will phase out for single taxpayers earning between $73,000 and $83,000 (up from $68,000 to $78,000) … and for married couples filing jointly earning $116,000 to $136,000 (up from $109,000 and $129,000 respectively).

If your spouse is covered by a workplace plan and you’re not, your deduction for an IRA phases out between $218,000 and $228,000 in 2023, up from $204,000 to $214,000 in 2022.

Roth IRA – Annual Contribution Limits

  • Increased to $6,500 from $6,000
  • Participants 50 and older can make an additional $3,000 catch-up contribution.

Note: The income phase-out for contributions to a Roth IRA for singles and heads of household will be $138,000 to $153,000 respectively in 2023, up from $129,000 to $144,000. For married couples filing jointly, the phase-out range will be $218,000 to $228,000, up from $204,000 to $214,000 this year.

Simple IRA Accounts – Annual Contribution Limits

  • Increased to $15,500, up from $14,000
  • If the Plan permits, employee participants 50 and older can make an additional $3,500 catch-up contribution, up from $3,000 in 2022.
  • Employee participation in other employer plans is limited to a combined annual contribution of $22,500.

Saver’s Credit

Low and moderate-income workers may add to their retirement fund value via federal tax credits that deliver a 100% reduction in the taxpayer’s tax-bill. Eligible workers may enjoy a tax credit in a range of 10% to 50% of contributions made to an IRA or employer sponsored retirement plan.

Note: The credit gradually reduces and phases out as a taxpayer’s income rises. In 2023, the credit will phase out at $73,000 for married couples filing joint tax returns (up from $68,000); $36,500 for singles and couples filing separately (up from $34,000); and $54,750 for heads of household (up from $51,000).

SEP IRAs – Annual Contribution Limits
(Self-employed & Small Business Owners)

  • Increased to $66,000 from 2022 limit of $61,000
  • Self-employed persons may contribute up to 20% of earnings up to $330,000, up from $305,000.

For more on how the above applies to your specific circumstances,
be sure to give Pearson & Co a call or drop an email. We’ll respond immediately.

23 Jan 2022
Required Minimum Distributions (RMDs)
Estate Planning, IRS, Retirement Pearson & Co, PC 0 comment

REQUIRED MINIMUM DISTRIBUTIONS FOR 2022

REQUIRED MINIMUM DISTRIBUTIONS FOR 2022
Important Reminders for Retirees

Required Minimum Distributions (RMDs)

Required Minimum Distributions (RMDs) are a fact of life for those of us with an Individual Retirement Account (IRA) or participate in a 401K plan … here referred to as retirement accounts.

The SECURE Act signed into law December 2019, includes a significant change to the mandatory RMD age requirement. The RMD age has been advanced to age 72 from the previous limit of 70½. This revision reflects that Americans are living and working longer. Notably, since the original law was enacted, life expectancy has increased more than 2 percent (1.6 years) for all Americans and more than 8 percent for those over age 65.

So, beginning January 1, 2020, money from the above retirement accounts must start flowing to you in specific, minimum amounts no later than April 1, following the year you reach age 72.  Other than Roth IRAs, RMD withdrawals apply to all other individual retirement accounts … IRA, Simple IRA or SEP IRA as well as 401K plans.

Note: Roth IRAs are not subject to mandatory withdrawals until after the death of the owner.

The RMD changes prove to be a boon to most taxpayers who can afford to delay taking money out.

The distribution amount will change from year to year based on accepted IRS tables that model anticipated life expectancy. Since life expectancy estimates diminish with age, annual RMD will vary as well. It is calculated by dividing an account’s year-end value by the distribution period determined by the IRS.

The table shown below is the Uniform Lifetime Table, the most commonly used of three life-expectancy charts that help retirement account holders figure mandatory distributions. The other tables are for beneficiaries of retirement funds and account holders who have much younger spouses.

Required Minimum Distribution Table 2022

Let’s take a look at how the revised RMD age limit affects a taxpayer with a retirement account valued at $100,000. Under the old rules, that person would be required to take a minimum IRA withdrawal of $3,650 at age 70½. Divide the value of the retirement account by the distribution period to determine the RMD … $100,000 divided by 27.4 = $3,650.

So, in keeping with the above calculations, assume our retiree is age 72 with a retirement account valued at $100,000. Note the corresponding distribution period (25.6). Divide the value of the retirement account by the distribution period to determine the RMD … $100,000 divided by 25.6 = $3,906.

Delaying receipt of the RMD until age 72 reduced the taxpayer’s expected lifetime taxable income by over $7,000 … $3,650 – 3,906 = $256 X 27.4.

Note: Make sure you do this for all traditional IRAs or 401 K accounts you have in your name. Once you add up all of the RMDs for each of your accounts, you can withdraw that total amount from one or more of your retirement accounts. You don’t have to take your RMD from each account as long as the total you withdraw satisfies your RMD responsibility. Consider withdrawing from smaller balance accounts and close them out to simplify and consolidate your retirement accounts

Why is a Minimum Distribution Required?

The good news is that you enjoyed years of tax deductions and (hopefully) tax deferred growth in your retirement account. So, it’s your money … why can’t you decide how much and when to take it out … or just leave it sit? The answer is the tax-man will get his due.

You paid no taxes on your deductible retirement plan contributions. And you paid no taxes on any incremental growth on your investments during the years accumulating your nest egg. Therefore, the IRS wants its just due when you withdraw funds in your retirement. That said, chances are your post-retirement tax bracket is lower than during your prime earning years, so you’ll likely keep more money than if you had not initiated your retirement account.

Similarly, if you were permitted to leave all your money in your retirement account, it would eventually become eligible to be passed on as inheritance and not trigger a taxable event. Your RMD compels you to take out at least a minimum amount which is added to your gross income and potentially subject to tax.

3 Frequently Asked Questions

There are three questions that are commonly asked and may be on your mind as well. It’s likely you will have others that we’d like to help you with … just give us a call or drop an email … we’ll respond promptly.

Do you need to take your entire RMD all at one time?
No. Frequency of withdrawals is not an issue. The important thing is that, in the aggregate, all your withdrawals add up to your RMD in the year required.

Should you appoint a named beneficiary for each of your retirement accounts?
Yes. By so doing you will avoid your account balance(s) being included in your estate in the event of your death.

Are there consequences if I don’t withdraw my RMD as required?
Yes. You may be subject to a 50 percent excise tax on the amount not distributed.

Other Considerations

The foregoing is not meant as a comprehensive recount of the RMD requirements. There are other considerations that may apply in your specific circumstances. Some issues may include:

  • Inherited retirement accounts and RMD after account owner dies
  • RMD based on Joint Life & Last Survivor Expectancy Table if your spouse is more than 10 years younger than you and is sole beneficiary

If any of the foregoing seems unclear as to how it applies to your specific circumstances, please keep in mind that Pearson & Co will help. Give us a call or drop an email. We’ll respond immediately.

29 Aug 2019
Estate Planning, News, Tax Law Pearson & Co, PC 0 comment

YOUR LIFE CYCLE … AND THE TAX CUTS & JOBS ACT (TCJA)

YOUR LIFE CYCLE … AND THE TAX CUTS & JOBS ACT (TCJA)
The TCJA Affects Your Tax Planning Regardless of Your Stage of Life

Taxes and Life Cycle

While there is every likelihood that there will be continued guidance from the IRS or legislators, here’s how we see the TCJA as it affects various stages in life for individual taxpayers. Keep in mind that almost all these provisions expire after 2025.

Life Events and the TCJA

Married adults now enjoy relief from the so-called “marriage penalty”. That means that their tax return filed jointly will more closely parallel that of two people filing as single

Personal and dependent exemptions are eliminated. In place of personal exemptions, TCJA essentially doubled the standard deduction. Likewise, in place of dependent exemptions, TCJA doubled the per child tax credit. Additionally, higher income families enjoy substantially increased income thresholds that trigger a phase-out of the credit yielding more tax savings.

Tax-advantaged education plans, 529 plans, now permit up to $10,000 may be used to pay for primary and secondary school … and enjoy tax-free withdrawal of that amount by parents and grandparents. Given the escalating costs of higher education, the tax-deferred feature of funds in 529 plans continues to be attractive and motivating to retain funds in the plan for as long as possible.

Taxpayers taking new mortgages are limited to interest deductions on the first $750,000 of loan principal and may no longer deduct interest for home equity debt … unless the loan is used to purchase, build or substantially renovate your home.

Itemized deductions for property taxes and state and local income or sales taxes now capped at $10,000.

Alternative Minimum Tax (AMT) exemption levels are increased and the income threshold at which the AMT exemption phases out is elevated. These moves will significantly reduce the number of tax payers subject to the AMT.

Job change expenses such as preparation of resumés, travel and other work-related costs are no longer permitted as an itemized deduction.

Moving expenses are eliminated as a deduction, other than for active-duty military under orders to relocate. The impact for employers is that reimbursing employees for moving expenses is no longer tax deductible.

Investment gains i.e., qualified dividends and long-term capital gains taxes, remain unchanged. However, of note is that the dollar amount breakpoint at which the rates apply has increased offering important tax savings to investors.

Taxpayers who support their elderly parents and choose to itemize may deduct out-of-pocket medical expenses at an increase from 7.5 percent to 10 percent in 2019.

The annual contribution to Achieving a Better Life Experience (ABLE) accounts is increased and may be used to claim the retirement saver’s credit as well. Additionally, funds in 529 plans may be rolled over to ABLE accounts to further benefit disabled individuals.

Couples divorcing after 2018 will find that alimony is no longer deductible, and payments to the recipient are no longer taxable as income.

Summary

Of course, the above, and more, is subject to interpretation and additional guidance by the IRS and federal legislators. So, here’s a suggestion if you have questions as to how the TCJA affects you and your tax planning.

A time-saving and less stressful approach is to give us a call or drop an email to schedule a time to review the specifics of your unique situation and develop an optimum tax strategy to benefit both you and your family.

10 Jul 2019
Pearson & Co. CPAs
Estate Planning, Tax Law Pearson & Co, PC 0 comment

PLAN TO SELL YOUR HOME?

PLAN TO SELL YOUR HOME?
Good News!  You May Qualify to Exclude Gain from Income

Home Selling Tax Advice from Pearson CPAs

Your home is likely your single most valuable asset.  Good to know that when you eventually sell it, most of the profit you make won’t go to the IRS.

Will you pay tax on the sale of your home? Now, anyone can exclude up to $250,000 of gain or $500,000 for a married couple filing jointly on the sale of a home. That means most people will pay no tax unless they have lived there for less than 2 out of the last 5 years.

Notably, this is not a one-time tax break … you can use this capital gain exclusion to avoid tax on a home sale repeatedly.

This good news may even prove to be better as there are additional steps you can take to further enhance the tax benefits of selling your home. Read on to figure out how you may qualify.

Three Qualification Tests

There are three tests you must meet in order to treat the gain from the sale of your main home as tax-free:

  • Ownership: You must have owned the home for at least two years during the five years prior to the date of your sale.
  • Use: You must have lived in the home as your principal residence for at least two of the five years prior to the date of sale.
  • Timing: During the 2-year period ending on the date of sale, you did not exclude gain from the sale of another home.

You can use this exclusion every time you sell a primary residence, as long as you satisfy these tests.

Note 1: Homeowners excluding all the gain do not need to report the sale on their tax return. If profit from the sale exceeds the $250,000 or $500,000 limit, the excess is reported as a capital gain at tax-filing time.

Note 2: Taxpayers who experience a loss when their main home sells for less than what they paid for it may not deduct the amount of the loss on their tax return.

How to Figure Whether You Have a Gain

You have a gain when you sell your house for more than the original cost that you paid.

If you purchased your home from an existing owner, the price you paid is the agreed to purchase price plus certain settlement and closing costs.

If you built your home, your original cost is the cost of the land, construction costs, architect fees and utility provider hookups.

If you inherited your home, best bet is to check with the executor of the estate to provide you with information about the basis of your home. There are different rules depending on the date of the previous owner’s death.

Your next step is to determine the adjusted basis … the cost of your home adjusted for tax purposes by improvements you’ve made or deductions you’ve taken. Improvements are those that added value to your home, prolonged its useful life, or gave it a new or different use … not included are expenses for routine maintenance and minor repairs. Deductions may include casualty losses, depreciation expenses, and a variety of other costs that may further reduce your adjusted cost basis.

For example, if the original cost of the home was $100,000 and you added a $5,000 patio, your adjusted basis becomes $105,000. If you then took an $8,000 casualty loss deduction, your adjusted basis becomes $97,000.

Important: As with most tax issues, there is more to the story. Best move on your part is to seek guidance from your tax professional.

Summary

Most home sellers don’t even have to report the home sale transaction to the IRS. But if you’re one of the exceptions, knowing the rules will help you hold down your tax bill. Might be best to seek professional help to ensure you’re in compliance.

Give us a call or drop an email to schedule a time to review the specifics of your unique situation.

30 Oct 2018
Estate Planning Pearson & Co, PC 0 comment

HOW TO CHOOSE THE EXECUTOR OF YOUR ESTATE

HOW TO CHOOSE THE EXECUTOR OF YOUR ESTATE
Never a Popularity Contest

How to select an Executor of your Will

Who Will Implement My Estate Plan Upon My Disability or Death?

Choosing the executor of your estate is the single most important decision you will make to minimize future unknowns, provide peace-of-mind for your family and create an orderly transition of assets in the event of your death or disability.

Your choice of capable people to administer your estate plan is critical. The individual or entity chosen will shoulder significant responsibilities in managing your estate plan directives.

Competency, harmony and willingness to serve are the operative bywords in selecting the people or entities that will carry out your wishes at a time you are no longer able to do so. Any of these managing “slots” may be filled by one or more individuals or a corporate entity such as a bank – or some combination of all three.

Competency

Your choice of an executor is not in the category of a popularity contest, nor the ranking of a family member. Choices should never be made simply because an individual is a close friend or your oldest child.  Your selection should reflect the individual’s capabilities and certainly never on the basis of hurting someone’s feelings.

Harmony

In some instances, it may be prudent to appoint two or more adults as joint executors. That said, there are at least a few circumstances to carefully consider. For example:

  • Appointing two siblings with an adversarial relationship creates the potential for an explosive and protracted delay in settling your estate according to your wishes.
  • Likewise, choosing two or more executors who have no history of successfully working together may be a recipe for a confrontational atmosphere that may lead to less than efficient management of your affairs.

If there is a need for co-executors and no clear choices of compatible individuals to fulfill those roles, you may appoint an entity such as a bank, trust company or a law firm that offers executor services.

Willingness

This element is closely tied to the above discussion of Competency. Assuming the executor candidate is competent, it is important to determine that person’s readiness to assume the required duties of the role he or she is expected to play. Depending on the complexity of the estate, it may be a far more overwhelming task than expected. Additionally, there are potential legal liabilities for negligent handling of the estate.

Of course, expertise does not have to be personally demonstrated in all aspects of “a life in the day of an executor”, as there is plenty of help available from a capable team of accounting, legal and investment professionals.

Of course, when you seek  to name an executor, you are urged to seek counsel and direction from competent accounting and legal professionals for guidance. This article is meant as a general discussion document and not to be construed as providing legal, accounting or tax advice.

Of course, at Pearson & Co. our work as accountants is to maximize your estate value and minimize your tax bite. In serving you, we can also introduce you to skilled estate planning professionals. If we can help with a referral … just ask.

31 Jul 2018
Estate Planning, Tax Credits, Tax Law Pearson & Co, PC 0 comment

VACATION RENTAL HOME BENEFITS & TAX BREAKS

VACATION RENTAL HOME BENEFITS & TAX BREAKS
Personal Use and As a Rental Unit

Well here we are half way through the summer and many of us have taken a vacation … maybe at a pricey resort or just day trips to the beach, lakes or the mountains. In this article, we’ll take a look at a vacation destination that could deliver more than just rest and relaxation, i.e.:

  • Less cost;
  • Added revenue stream;
  • Tax breaks; plus
  • Potential for capital appreciation.

That briefly outlines the advantages of a second home when employed as a vacation rental. So if you own a second home, or the boost in the economy prompts you to consider a purchase, then this article is for you.

OK, so let’s get a few basic definitions out of the way and examine tax treatment based on the mix of personal and rental use of a property.

Vacation Rental Home Benefits & Tax Breaks

A Vacation Rental Home … Not Necessarily a House

When it comes to vacation rental homes, the Internal Revenue Service makes the distinction that the property is used as a residence as opposed to a property used for businesses, such as an office building or retail center. Perhaps surprisingly, the IRS considers a “dwelling unit” to be a home, apartment, condo, mobile home, boat, or any other structure containing sleeping space, toilet, and cooking facilities. So that expands your potential investment choices in vacation rentals.

Note: If the property is used on a transient basis, as a hotel room would be, the IRS does not recognize it as a dwelling unit.

Personal Use vs. Rental – Effect on Tax Benefits

Pearson & Co. CPAs Blog Post - July 2018There are limits on the type and amount of expenses that you can deduct depending on how often you use the property for personal use and how often you rent it to others.

In general, there are two types of expenses associated with a vacation home – trade or business (or production of income) expenses and deductible personal expenses. Deductible personal expenses are items that are deductible in their entirety, regardless of whether the vacation home is personal use or rental property. Expenses in this category include casualty losses, state and local property taxes, and interest.

The first limitation on the deductibility of expenses is that the expenses related to a trade or business or the production of income (rental expenses) are only deductible to the extent you do not use the home for personal use. Basically, that is the number of days the unit is rented divided by its use for any other purpose during the taxable year – excluding days for repairs and maintenance. The resulting number is the amount of expenses tentatively deductible as rental expenses. There is more to the story, but these are the basics.

A second limitation also applies if your personal use is so extensive that the dwelling unit is treated as your “residence” for tax purposes. If the number of personal use days exceeds the greater of (1) 14 days or (2) 10% of the number of days the unit was rented at fair rental value, then the dwelling unit is a “residence” and you may not deduct any rental expenses that exceed the gross rental income from the property. Any deductible personal expenses not deducted because of the gross income limitation are allowed as itemized deductions.

In a few cases you must treat someone else’s use as your own. These include any day in which the home was used by a(n):

  • Member of your family,
  • Co-owner,
  • Member of a co-owner’s family,
  • Individual who is renting for less than fair rental value, or
  • Individual who is using your house under a “switching arrangement” that enables you to use another dwelling unit (such as switching a beach house and a mountain cabin).

It is important to note that family members’ use counts as your personal use even if they are paying fair rental value (unless they use the home for their primary residence). This is also true for the switching arrangement.

 

Rental Income and Tax Deductible Offsets

 

As previously mentioned, rental income generates an added revenue stream. Of course, that added income must be appropriately reported at tax time along with rent-related expense deductions.

Rent-related expenses may include such items as utilities, maintenance, upkeep, mortgage interest, real estate taxes and insurance. Additionally, the landlord may claim a depreciation deduction that relates to rental use. Interestingly, and often overlooked, is a deduction for the owner’s costs to travel to the vacation home on business connected to the rental.

Note: The Tax Cuts and Jobs Act include provisions that limit deductibility for acquisition debt and deductions for state and local taxes. There may be additional tax issues that could affect your unique tax status.

Takeaways

This article provides a basic overview of the definition of a dwelling unit and rules regarding vacation home rental expenses. There are other details to be considered. That said, if you own a second home and are thinking about using it as a rental property, or contemplating becoming a second home vacation rental landlord, I encourage you to call me to discuss your situation in more depth.

Pearson & Co. stands ready to help. Call or email … we’ll respond promptly!

 

 

24 Nov 2017
Estate Planning Pearson & Co, PC 0 comment

BEN FRANKLIN AND YOUR ESTATE

Peace of Mind for Your Family & Orderly Transition of Assets

Ben Franklin and Your Estate

“In this world nothing can be said to be certain, except death and taxes.”
–  Benjamin Franklin

Nearly 230 years later … truer words were never spoken! There is no cure for either, but there are strategies to mitigate the effect of taxes in the event of death or disability.

That brings us to the topic of Estate Planning to deal with the unknown future as it relates to health and longevity of life, provide peace-of-mind for your family and create an orderly transition of assets in the event of death or disability. Additionally, as accountants, we seek to assist with all of the above in the most tax-favored ways possible.

A quick statistic: Approximately 55 percent of American adults do not have a will or other estate plan in place, according to LexisNexis.

Pearson & Co., PC - Certified Public Accountants in Richmond, VA

The Perils in the Absence of Adequate Estate Planning

In the absence of adequate estate planning, disability due to illness or injury can multiply otherwise avoidable legal and financial challenges. For example, one mistaken belief by many married couples is that financial and health care decisions can be made for one another in the event either spouse becomes disabled. Not necessarily true!

The able-bodied spouse may not automatically have access to the disabled spouse’s medical information and finances.

Likewise, in the event of death, there should be a carefully developed roadmap for the distribution of the deceased’s assets, minimize estate and transfer taxes, specify care for minor children and minimize or eliminate preventable conflicts among family and heirs.

The solution to this is the subject of this article – a properly crafted Estate Plan to protect, preserve and manage your estate in the event of death or disability.

Note: Your last name does not have to be Gates, Bezos or Zuckerberg to be a candidate for an estate plan. Virtually anyone 18 years old, married or single, should arrange for a trusted representative to make personal, health care and financial decisions in the event of incapacity to do so or death.

Selection of Your Decision Makers

Selecting your Estate Plan Decision MakersA critical element of your plan is your selection of decision makers, i.e. the executors, trustees, agents and guardians who will shoulder significant responsibilities on your behalf. Choices should never be made simply because an individual is a family member or close friend. Your selection should reflect the individual’s capabilities and willingness to fulfill the required duties of the role he or she is expected to play.

Choosing the executor of your estate is perhaps the single most important decision you will make to deal with the unknown future, provide peace-of-mind for your family and create an orderly transition of assets in the event of death or disability.

Competency, harmony and willingness to serve are the key ingredients to a successful choice of an executor. Let’s take a look at each.

  • Competency: Your choice of an executor is not that of a popularity contest, nor the age-ranking of a family member. Choices should never be made simply because an individual is a close friend , your oldest child or concern for hurting someone’s feelings. Your selection should reflect the individual’s capabilities, competencies and willingness to serve.
  • Harmony: In some instances, it may be prudent to appoint two or more adults as joint executors. Be thoughtful! Choosing two or more executors who have no history of successfully working together may create a confrontational atmosphere leading to less than efficient management of your affairs.
  • Willingness: Assuming the executor candidate is competent, it is important to determine that person’s readiness to assume the required duties of the role. Depending on the complexity of the estate, it may be a far more overwhelming task than expected. Additionally, there are potential legal liabilities for negligent handling of the estate.
  • Third-Party Choices: If there are no clear choices of an individual or compatible multiple of individuals to fulfill the role of executor, you may appoint an entity such as a bank, trust company or a law firm that offers executor services.

Now consider all of the above in the context of complexity of the estate, possible warring beneficiaries and outstanding legal issues. It may be a simple undertaking with a modest estate. It may prove daunting in an estate with multi-faceted intricacies. Remember, this will be a one-time, part-time job for an individual executor and may require a broad range of skills.

Of course, expertise does not have to be personally demonstrated in all aspects of “a day in the life of an executor”, as there is plenty of help available from a capable team of accounting, legal and investment professionals.

Client Goals and Values

Creating Your Estate Plan

Estate Planning is not a do-it-yourself project. Your best course of action is to seek help from experienced experts who specialize in estate planning matters. Once chosen, your advisors will determine the issues to be addressed and the appropriate documentation required to ensure instructions consistent with your desires.

Among the documents your advisors may recommend are a Will; Durable Power of Attorney for Health Care Decisions; Living Will; Durable Power of Attorney for Financial Matters, one or more Trusts; and a HIPAA Authorization. Estate plans do not lend themselves to one-size-fits-all, so the specifics of yours will be determined based on your needs, desires and estate valuations.

Summary

If the above appears daunting to you, that just underscores the need for competent, experienced estate planning advice. As you may anticipate, with so many possible combinations of documents and provisions of each, there is the potential for even simple mistakes to wreak havoc on the validity of your Estate Plan.

Your attorney and accountant will likely collaborate to ensure tax and other financial issues are properly addressed. Additionally, your financial advisors and bankers will be invaluable in offering guidance on planning the proper asset allocation and investment management of your estate.

Of course, at Pearson & Co. our work as accountants is to maximize your estate value and minimize your tax bite. In serving you, we can also introduce you to skilled estate planning professionals. If we can help with a referral … just ask.

 

 

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