Because filing your taxes involves taking stock of your finances, post-tax season is often the most convenient time to engage in financial planning. Below are a few things to think about before you put away all your paperwork.
1. Are your powers of attorney up to date?
Have you chosen a financial power of attorney and a medical power of attorney? Have you created a living will?
Often, life events like births, marriages, divorces, retirement and death can change what you want to do with your money and who you want to be involved. Check that the agents you have listed are still who you would like to fill those positions, and make sure that you have listed appropriate substitutes.
2. Have you established your estate plan with the correct legal documents?
If you already have estate planning documents, good for you! Creating a will and/or a trust is the best way to ensure that your wishes will be honored after your passing or during incapacity.
If you have established these legal documents, it is a good time to do a review of the documents and assets that are a part of your estate plan. This tax time review will ensure that any new assets are titled appropriately and beneficiary designations are up to date.
Contrary to popular belief, you don’t have to be wealthy to have a will or a trust – these options exist for anyone who has a vision for their assets and a desire to protect their family. Everyone has an estate and an estate plan. It is up to you to decide if you want to have a role in the plan, or if you want to leave it to the Courts.
3. Are kids involved? Or grandkids?
Yes, we all want our kids/grandkids to inherit assets, but did you know that a minor child cannot inherit the funds without a court supervising the funds? A minor child can only inherit funds through a legally established guardianship. The Court will appoint a guardian of the child’s estate. Proper estate planning can avoid the need for Court intervention and supervision. An additional consideration is beneficiaries that may have special needs and receive some form of government support to assist with their medical needs. Did you know that inheriting funds could disqualify them from those benefits? Again, appropriate planning will protect your heirs from an unfortunate situation.
4. Have you considered tax planning?
- Did you track your deductions well or do you need to do better next year?
- Does it make sense to lower your tax liability by making strategic gifts to family members or charitable donations?
- Will you be subject to an estate tax some day?
- Should you increase contributions to retirement plans? Put more in savings?
5. Will you have enough retirement savings to retire?
Unless you work at a single company for your entire career, it’s easy to amass several different retirement accounts. Consolidating accounts can be a smart way to simplify your retirement planning and ensure your investment decisions regarding retirement assets are aligned with your financial objectives.
Having professionals involved in your investment decisions can be a powerful force for securing a strong financial future for yourself and the loved ones who will survive you.
The Wealth Management team at First Arkansas Bank & Trust is here to answer your questions, explain your options and help you secure peace of mind about your financial future. Whether you are just starting to consider estate planning, searching for a reliable and compassionate trustee or looking for a non-commissioned investment approach, the expertise and level of service you will find at FAB&T is unrivaled. To learn more, visit https://www.fabandt.com/wealth/wealth-management-and-estate-planning.