Estate Planning for Your Kids

Estate Planning for Your Kids discusses some planning steps you can take for your children. No one likes to think about their death. But just like taxes, death is inevitable. So, when you meet your end, do you know who will inherit your possessions? If you have kids, how will you ensure they will receive and further know how to handle their inheritances? Don’t assume the answers to those questions unless you have an estate plan. Therefore, you think of personal estate planning as a benefit for your kids, and not just a subject to avoid or be put off.

Estate Planning for Your Kids. Image of an Estate Planning book with inheritance tax and living trust forms with bokeh lights in orange and yellow in background.
Plan to help make life a little easier for your children.
Your Lack of Planning Causes More Pain

When you fail to put your financial affairs in order, your children will deal with the consequences. If that’s what you want, quit reading right now. We can’t help you.

But if you want to ensure you’ve taken care of your kids, you need to know how to plan. Adult children in particular can face several common problems when their parents fail to plan properly. Such as the location of and title to the parent’s assets. Assets may be titled to be automatically distributed to a party or in a percentage to a party that you were unaware of; the adverse is possible as well.

Apart from that, they can also face unexpected inheritance taxes or not knowing where to find financial account information. Just placing someone’s name on an account doesn’t automatically mean they know it exists…or how to handle it.

To make matters more complicated, inheritance laws vary from state to state.

Communicate Wishes

Many parents do an amazing job teaching their children about budgeting, saving, and investing. Yet, they fail to communicate any information whatsoever about their inheritances. Consider this your final and most important financial lesson.

Parents often just assume children will know what they’ll inherit and how to handle the process to receive it. But this ambiguity can lead to some nasty consequences after your death if you don’t make your wishes clear.

Hold a good old-fashioned family meeting to share estate plans with everyone. If that’s not possible, make sure you have frank conversations with each of your heirs. Either way, provide written plans with specifics that spell out who gets what (and when, if applicable). Make sure they each know where to find copies of legal documents, too.

Many financial advisors also recommend their clients arrange a time for them to meet with their heirs. This allows your children to ask questions and meet the person helping with financial matters after their parent’s death. They’ve found that having a familiar face can ease the transition during a time of grieving.

Setting Your Kids Up

It doesn’t matter whether you are of modest means or have extensive asset holdings, put the right documents in place. This will ensure you’ve protected your loved ones and the property you’ve passed down to them.

Working with an experienced estate planning attorney can ensure you structure your assets in a way to minimize or even eliminate inheritance taxation. When you come to our office, we listen carefully to your values and your goals.

We can help with:

Will preparation

Advance health care declarations

Powers of attorney

Trust creation and administration

Business succession planning

Probate administration

Estate Planning for Your Kids. Closeup of a hand signing a will in black & white.

Set your finances up to protect your children’s interests. Our law office exists to protect your rights and your money. Call us at 724-216-5180 or complete our online form to learn how.

Tax Planning for Consistency

Tax Planning for Consistency is a blog that goes right along with our previous tax planning article to eliminate surprises and save money. Now that the dust has settled with tax season, let’s take a look back at what happened. Were you surprised by how little you got back in your refund this year? Or maybe you owed more than you’d expected? Safe to say, surprises from the IRS generally don’t mean good news. When you do tax planning for consistency every year, you’ll find you’re less and less surprised each April. But you have to do your homework… or know someone who can help you.

Tax Planning for Consistency. A blue, white, and black graphic of the word TAX and a calculator and calendar.
Were you surprised by how little you got back in your refund this year?
Better Planning Eliminates Surprises

Instead of waiting until somewhere around mid-April to get a handle on your tax responsibilities, review them quarterly. If you own a small business, that means making payments or submitting loss statements on quarterly tax estimates.

Additionally, review your purchasing needs for new equipment or evaluate how other expenses might impact your tax responsibilities. Consider any new employees or contracts you’ve taken on. This is also a good time to review profits and losses to help you better plan for the next quarter.

Not only that, but you can also get a better idea of how well you’ve accounted for year-end taxes. Also, by sending accurate quarter tax estimate payments you eliminate those pesky late penalties the IRS loves to tack on.

When you take time to plan out your strategy, you can attack your taxes each year in more manageable chunks. Then you get a more consistent (and reliable) idea of your tax liability.

Changes in Tax Law

The IRS likes to keep everyone on their toes by changing the rules every year. Everything from standard deduction and tax brackets shifts pretty much annually. But pandemic-related tax provisions made things even more complicated, especially when they went away.

Occasionally, changes in tax laws work to your advantage, but sometimes only temporarily. For example, the child and dependent care credit boosted the maximum credit percentage in 2021 (up to 50%) dropped to 35%. And while it was fully refundable in 2021, that’s no longer the case in 2022.

But more likely you saw things like unemployment income taxed again. In 2020, the American Rescue Plan allowed impacted individuals to waive up to $10,200 of paid unemployment. In 2021? If you didn’t already withhold taxes from your benefits, unemployment compensation taxation may have come as a surprise.

Finally, unsure of how to get started? Relax! Our experienced tax professionals have helped hundreds of taxpayers just like you. We’ll help you understand how the latest changes in the tax code might affect you. And we’ll help you plan your year for better consistency. Complete our online form or call us today at 724-216-5180 to learn more.

Cut those taxes by investing in a consistent tax planning strategy.

Five Benefits of Tax Planning

Five Benefits of Tax Planning covers five reasons why a proper tax plan saves you time, money, and stress. Now that April’s rush to file taxes on time has settled down, let’s talk 2022 taxes returns! I can hear you groaning from my office. You probably don’t want me to tell you this, but some people need reminding. I’ll spare you the lecture and give you five benefits of tax planning.

Five Benefits of Tax Planning. An image of a To Do list with the words Tax Planning and a desk and computer in the background.
Tax planning saves you time, money, and stress.
Quarterly Reviews

Next year’s tax return probably doesn’t rank very high on your list of priorities right now, does it? But when you take the time to make incremental adjustments during the year, your April will feel much less painful.

Whether you file personal or business returns or both, quarterly reviews help you get more organized for April. Businesses need to file quarterly estimates and quarterly reviews help to decrease the pain of those sessions, too.

The Payoff of Planning

1. Less Stress

I don’t know anyone, including adrenaline junkies, who enjoys scrambling around looking for lost receipts at the last minute. When you plan out a bit of work each quarter, that work creates much less stress ahead of filing.

2. Fewer Errors

Less stress and more time to check your work will also result in fewer errors. Tax return errors, especially when you file yourself, can get incredibly expensive if you mess something up. You also have time to run questions by a tax planning professional to further reduce your chance of error.

3. Avoid Penalties

When you wait to file taxes until the last minute, you may miss something that you should’ve submitted. By the time the IRS is ​kind enough to tell you, they’ve usually already tacked on penalties for filing late. Penalties continue to accrue interest until you pay off the principal, too. Ultimately, this makes the bill much more expensive than the original amount.

4. Minimize Tax Liability

With proper time to plan, you can also make more strategic decisions on how to minimize how much you owe. Maybe you decide to make a larger purchase this year or increase your retirement savings contributions. If you wait until the last minute, you won’t have time to adjust your course.

5. Research New Tax Laws

As you adjust your course, you can also see how new tax laws impact your current plan. The IRS loves to come up with new laws every year. If you don’t keep up with them, you can leave money on the table or end up owing more.

Need help getting it together for next tax season? Our experienced tax law professionals can help you minimize any taxes you owe and ensure you comply with all applicable laws. We can do a much better job together if we talk regularly throughout the year. And you’ll learn way more than just these five benefits of tax planning. Complete our online form or call us today at 724-216-5180 to learn more.

John A. Cochran, Esq. logo in black and white.

kind enough to tell you, they’ve usually already tacked on penalties for filing late. Penalties continue to accrue interest until you pay off the principal, too. Ultimately, this makes the bill much more expensive than the original amount. 4. Minimize Tax Liability With proper time to plan, you can also make more strategic decisions on how to minimize how much you owe. Maybe you decide to make a larger purchase this year or increase your retirement savings contributions. If you wait until the last minute, you won’t have time to adjust your course. 5. Research New Tax Laws As you adjust your course, you can also see how new tax laws impact your current plan. The IRS loves to come up with new laws every year . If you don’t keep up with them, you can leave money on the table or end up owing more.