One thing that presidents have (mostly) been is responsible. Presidents can teach us a lot. They are usually hard-working, dedicated individuals. Despite our political differences, much can be learned from these leaders of the free world. That includes tenacity, perseverance, and responsibility. You might be thinking of your favorite president now. As you can imagine, there were probably a lot of sides to them that the world didn’t see. But they kept a dedicated cabinet around them that helped them make important decisions. Presidents have to be prepared for anything, and so do we. 

Here are ways that you can emulate responsibility (like your favorite president) when it comes to your estate plan: 

Your Kids

If you have kids, there are two major areas in which you can show responsibility. These are guardianship and college savings. Of course, the whole estate plan itself goes towards helping your kids, but these two tools are most specific to them. 

Guardianship. In your estate plan, you can include information about guardianship and who you want to take care of your children in case something happens to you. God forbid anything does, but you need to be prepared for anything, just in case. Choose the guardian that will be most responsible and nurturing day-in and day-out. Check with the proposed guardian first to make sure that they are okay with being named for guardianship. 

College savings. What you may not realize is that the IRS offers a tax-advantaged savings plan for you if you want to save for your kids’ college. You can choose a savings account, or you can pay the whole of tuition as a credit to be applied later. This plan, called a 529 plan, will help you provide for your child’s future. Each state has its own rules, so make sure that you consult an estate planner to walk you through the process. 

Your Assets 

Your home and personal property is important to you, of course, but have you thought of what you will do when you pass on? You want to ensure that your assets are transferred to people you know will take care of them. Or, perhaps you want the assets liquidated upon your death and the proceeds distributed. A trust is often the best way to accomplish this asset protection.

Your Health 

If you become sick and are in the hospital, you may not have the capacity to make your own decisions. Yet, at the same time, you might have specific wishes for your care. In order to communicate those instructions after you’ve become incapacitated, you should have a healthcare directive. This document contains your instructions to doctors, hospitals, nurses, hospice, and others who can ensure that you get the care you need and want.

Your Finances 

Similarly, you might not be able to give instructions about your finances. This is why you should appoint a power of attorney to make these decisions for you. A POA is a trusted official that you designate to take care of your money and allocate your resources appropriately. This is an extremely important position. When appointing your POA, think long and hard about who will best carry this out.

Your Legacy 

Above all, responsible estate planning is about your legacy. You don’t want to stick your family in probate court for month after month. Executing a well-planned estate plan will ensure that your family is able to quickly and conveniently wrap up your affairs.

The list above includes things that are important to everyone. They matter greatly when it comes to your quality of life. Make good decisions when it comes to your future and protect the list above tenaciously. Responsibility is one of the most important traits when it comes to your estate plan. 

Valentine’s Day is the season of red hearts, chocolate, and flowers. It’s easy to get caught up in the V-Day rush. You’ve probably made plans to go on a date (or not), and the season of love may have you thinking about your assets and who you want to have them. If it’s not getting you thinking about that, you should. All too often, people let love cloud their judgment. It’s not difficult to understand. When you love someone, you want to help them, and that might lead you to make financial decisions you regret later on. That is why it is important to consult with an estate planner before you decide to transfer any assets or make big decisions. You don’t want to end up doing something you regret. 

Here are some ways in which love might cloud your judgment when it comes to your estate: 

Your Assets

Your home and personal belongings are probably among the most important material things to you. When you think of what you want done with them after you’re gone, you likely want them to go to someone you love who will take care of them. We all love our relatives, but not all of them are fiscally responsible. When you’re considering who you should pass on your assets to, think through the scenario fully and take an objective look. Because, often, we have a subjective view of our family, you may want to consult an estate planning attorney about your proposed transferee. 

Powers of Attorney

Your powers of attorney for finances and healthcare make decisions for you when you’re too incapacitated to make them yourself. They decide where your money goes and what it goes to pay off, and they also decide what happens to you in the hospital. Needless to say, these are huge responsibilities. And they require a cool head and a lot of focus. You might love your spouse, but you also might think that they wouldn’t be the right fit as POA. That’s not an easy conversation to have, and an estate planner can help you with that. But one thing you do not want to do is make someone your POA just because you don’t want to hurt their feelings.

Guardianship 

If you have minor children, you probably have some idea of who you would leave in charge of them in the even that something happened to you. Make sure you write this down in your estate plan. A guardian is the person who will shape your child and help them become an adult. That has life-changing implications. When selecting your guardian, think about how you want your child’s future to play out. Consult with the proposed guardian before putting them into your estate plan. 

New People Too Soon 

So, you’ve met someone, and you really like them. And that’s great! It’s always a good thing to be able to envision a future with someone. But, not to be a wet blanket, make sure that you wait a little while before giving them a position of power in your estate plan. You don’t want to rush into anything too quickly. For example, if you meet someone and get caught in a whirlwind romance, you might decide to leave them your house. However, if you change the paperwork, they end up turning out to be less-than-ideal, and you die without making the change back, that could spell disaster. You’ve just given someone you don’t even like a house. The point is, don’t rush into anything when it comes to your assets. 

This article probably isn’t the most fun Valentine’s Day read, but it is important. It’s a shame when people allow their love to cloud their judgment and cause them to make decisions that can harm them or their family. Talk to an attorney before making any major, spur-of-the-moment decisions. If there’s one thing you don’t want to do in a rash of decision-making, it’s your estate plan. 

Once again, tax season is upon us. This time of the year isn’t exactly pleasant, but it is inevitable. While asking for positivity when it comes to taxes might be a stretch, you should at least be prompt about filing. It’s better to just get it over with. There are consequences if you get them in late, and the consequences range from irritating to serious. Here are some tips to preparing your taxes in time, as well as some changes to know about. There are many new rules in effect with the new presidential administration.

There is a chance that your filing might look very different this year as opposed to last year. That’s why you should throw out the playbook from last year and look at your taxes with a fresh eye. 

Child Tax Credit 

The new tax reform laws boosted the child tax credit. If you have kids, you will probably benefit from this new rule. If you have children who are sixteen or under (and who qualify for the credit), the amount you can claim is $2,000. That’s double 2017’s amount, which was just $1,000. Also, there are new guidelines as to who can claim the tax credit. These new income guidelines expand who can take the credit. This means that even if you couldn’t take it before, you may be able to now. This is an example of why it is important to take a look at your taxes anew. 

State v. Federal Taxes

Note that state taxes might not mirror federal taxes. You could qualify for federal deductions while seeing little to no change in your state taxes. Some states may have a flat tax, while others do not. While this is not news to someone who has been filing for a while, new filers should not get caught unawares by the difference in the systems. Making a mistake might end up costing you. This is why you shouldn’t be afraid to consult a tax planner for assistance. What you pay them to do your taxes is far less what you’ll owe the IRS in penalties. 

Standard v. Itemized Deductions

One of the most notable changes the tax reform law brings has to do with standard and itemized deductions. The standard deduction has increased. Itemized deductions, by contrast, have decreased. For many households, it now makes more sense to take the standard deduction than to itemize. At the end of the day, the principle is simple math. If the itemized deductions give you more money, itemize. If the standard deductions give you more money, take the standard deduction. Just make sure you’re adding up the numbers to see which one gives you the higher return. 

Think About Retirement Accounts 

Another tax tip is to think about retirement accounts. Come 2019, retirement plans such as a 401(K) or IRA have higher maximum contribution limits. This means that if you start now (or keep up with the account you have), you can increase tax savings even more, as these accounts are tax-advantaged. This tip works for any year, however. Retirement accounts are an excellent way to both plan for the future and save money.  

Consider Electronic Filing 

Think about filing electronically. The error rate for electronic filing is lower than it is for paper filing, and electronic filing is also faster. The second it goes through, the IRS acknowledges that they have received your tax filing. Additionally, it is easier on the environment to not use paper. Note that if you make less than $58,000 (AGI), you can file electronically for free. 

Consequences 

If you’re late on your taxes, the consequences will hit April 15. The monetary fine ranges from 5% to 25% of the taxes you owe. This is per month, not per year. You might also forfeit your refund check. At worst, you could be arrested. The IRS will send you a bunch of paper notifications and even a representative to knock on your door before this happens, but arrest is the last resort. If you owe more than $25,000 and you’re evading payment, that could mean a jail sentence. 

Once again, April 15th is the deadline. April 15th falls on a Monday this year. These tax tips are just some of the many ways to file taxes promptly while saving money where you can. No one likes paying taxes, but you have to. Hopefully, these tips will make the process a little more painless. Consult a tax planner to maximize savings and minimize error. 

A New Year brings tons of opportunities for you to make and achieve resolutions. Whether you’re improving your diet, finances, weight, health, or lifestyle, make this year your year. A big part of ensuring that you’re ready to meet the New Year head-on is to plan properly. Planning can help safeguard against challenges. Think about it. For weight loss, you plan your meals and exercise routine. For finances, you plan out your budget. Planning is a key part of meeting your goals.

Estate planning is no different. Throughout the year, you should not only think ahead in terms of your lifestyle; you should also be prepared to meet financial challenges you may come across. Here are some key life events or changes and what you may want to do to plan for them. 

New Family Members

Is a new family member joining you? Perhaps a relative is expecting a baby or someone in your family is getting married. If that is the case, you should adjust your estate plan to reflect these new changes. For example, if you have grandchildren (or are expecting some) and you want them to receive some of your estate, consider setting up a trust that will grant them the assets once they are of age. A trust will let them receive the asset immediately upon the date of your choosing, as it goes into effect right away. This will allow them to avoid probate court, too.

…Or Maybe Just Some New Assets 

Maybe you don’t have a new family member, but you did get some new assets. Perhaps you’re buying a boat, new stocks, another home, etc. in 2019. You will want to think about what will happen to that asset after you pass away. While that’s not exactly a positive thing to consider, it’s important to ensure that the asset, if you own it, goes into the right hands. Again, as stated in the previous section, you could set up a trust. Or, you could set up a different type of transfer. Either way, put these new assets into your estate plan to guard them against probate court. 

Any Upcoming College Plans

If your kids or grandkids are considering college, you might want to take a look at a 529 plan. This is a tax savings plan that the IRS offers. Another name for the 529 plan is a “qualified tuition plan.” The IRS offers a 529 plan to encourage people to save up for college. You can choose from either a prepaid tuition plan or a college savings plan. Prepaid tuition plans let the plan holder purchase credits from their chosen educational institution, while savings plans act as investment accounts for someone saving up to attend college. Each comes with their own tax advantages, benefits, and disadvantages. If someone in your family is attending college and you want to help them out, consider taking a look at your state’s 529 plan. 

Sickness

People get sick. Unfortunately, it happens, and the best way to deal with it is to meet the challenge head on. To prepare for this unpleasant surprise, you should complete a healthcare directive and name your power of attorney. A healthcare directive details your instructions to the hospital or doctor taking care of you. The directive gives these instructions if you are too incapacitated to deliver them yourself. A power of attorney also lets a trusted individual (who you select) control your finances and make financial decisions on your behalf. Both of these financial tools give you autonomy in your decision-making, even when you are sick.

Aging: Still Inevitable

Another reason to take a close look at the sufficiency of your estate plan is the inevitable fact that people age. You will want to begin thinking about where you want your assets to go after you pass on. An effective estate plan will allow your assets to pass to your family without the involvement of probate court. 

These are just some of the changes you might experience this new year. Right now, we’re only in the first few weeks of the year. There is still time to plan ahead and avoid any unpleasant surprises. When it comes to your other New Years’ resolutions, you will want to get a plan together for success. Your finances are no exception. 

Hopefully, your New Year is off to a good start! There’s no telling what 2019 will bring, and that’s both exciting and maybe even a little scary. 2019 will probably come with some surprises, and these surprises can be pleasant or less-than. One way that you can deal with challenges successfully is to plan in advance for them. Formulating concrete plans for less-than-pleasant surprises will help take the edge off them if they happen. 

People get sick, and people pass away. These types of things are out of our control. In order to at least make these events more manageable, you should plan ahead. Handling these events is not out of your hands, even if the occurrence itself is. Here are some “worst case scenario” surprises that 2019 might (but hopefully will not) bring and how to deal with them. 

Sickness: Making Healthcare Decisions

Sickness can be serious. You also may have some predesignated notions about how you want doctors and nurses to care for you when you are sick. Just because you are incapacitated does not mean that your wishes will be ignored. By setting up a healthcare directive, you ensure that your care preferences are honored. A healthcare directive is a document that details any directions you may have for doctors. A classic example of this is a “DNR” (Do Not Resuscitate) instruction. These are the types of closely-held decisions you want upheld even if you cannot communicate them verbally. A healthcare directive lets you do this.

Sickness: Making Financial Decisions

Another important decision-making area is finances. Your finances enter perilous territory when you are sick. Before this happens, you should nominate a power of attorney to take care of your finances. This POA is someone you trust. You know he or she will make the best decisions for you. You can give him or her instructions while you are healthy that will give them guidance about what to do in the event you become incapacitated. Your finances do not have to suffer just because your health is in a bad situation. Nominating a POA gives you control over your money. 

Passing Away

Death is also inevitable. Depressing as that may sound, it is, sadly, true. Death also definitely qualifies as an unpleasant surprise. If you die, do you know where your assets and property will go? The answer “the courts will decide” is not going to work. Probate court will divide your estate and pay off your creditors first. Then, your family will get whatever is left. By setting up an estate plan with tools such as living trusts, you can ensure that your assets will go to the people you select. You avoid saddling others with the burden of probate court when you structure your estate plan properly. 

Guardianship 

If you have children and something happens to you, you will obviously want someone responsible to take care of them. Setting up guardianship in your estate plan allows you to appoint the guardian. This way, you will have peace of mind that your kids will be taken care of if something happens. If you do not have guardianship set up, the court will appoint a guardian, and it might not be a person you would choose. Make sure to ask your chosen guardian if they agree with your decision before setting the guardianship up. 

Divorces 

Lastly, divorce is very common. More than half of marriages end in divorce. If you are undergoing this unpleasant process, you know that jointly-owned property is often very difficult to unravel. Deciding who owns what is not easy, especially if the divorce is acrimonious. When working on your estate plan, you will need to adjust for the divorce. If you left something to your ex-wife in the event of your death, you might want to change that. An estate planner can help you with this. The whole divorce process almost always affects estate plans, so it is best to face these changes head-on.

This article is somewhat of a bummer, but it is important to prepare for any unpleasant surprises that 2019 might bring. While you shouldn’t be pessimistic, optimism does not mean lack of preparation. Guarding your finances and protecting dependents is essential to a well-rounded estate plan.