Archives for December 2013

Year End Beneficiary Designation Review – Make it A Holiday Tradition

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When you look around your holiday table this year, you will probably not be thinking about the beneficiary designations on your 401(k), IRAs or life insurance policies.  But you should… perhaps make it a new holiday tradition.

Having the wrong beneficiary designated on these assets and on other things like bank accounts, annuities and 529 college savings plans is probably one of the biggest estate planning mistakes people make.  This is because most of us name those beneficiaries when we initiate a plan or open an account and then forget to change or update the designations as our personal and financial lives change.

However, life does change.  Often more frequently than we think. This is why you need to review and update your beneficiary designations at least once a year.  For example, here are seven scenarios that could cause a change in beneficiary designation:

  • You got married, divorced or remarried
  • You changed jobs and moved your retirement account
  • One of your beneficiaries died
  • The birth of a child or grandchild
  • You moved your account to another financial institution
  • One of your beneficiaries became disabled
  • You did created or updated a trust or will

Additionally, it is not uncommon for an institution to incorrectly process a beneficiary designation, especially if you are not designating “standard” beneficiaries.

Not having the correct beneficiary designated (or designating a minor) can wreak havoc on your family when something happens to you as well as create tax issues for your heirs.  You could unintentionally disinherit the very people you care the most about and potentially tie up your estate in probate or, worse, litigation.

Enjoy your holiday with family, but take an hour or two before the New Year and make it a point to review your beneficiary designations and , if necessary, update them.

If you don’t already have an estate plan – or have one that needs to be reviewed and updated – make 2014 the year you get this done.   Please call us today to schedule your appointment at 720-248-7621.

Filed Under: Colorado Estate Law Information, Family Estate Planning, Kids Protection Planning, Tax Planning ·

Six Tax Questions to Ask Before Year-End

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Everyone’s “to-do” lists seem to grow longer at this time of year, but yours may be incomplete if you haven’t yet reviewed  and answered these six tax questions before the end of the year. If you need help answering these questions, please call our office at 720-248-7621 for an appointment or a referral to a trusted tax professional that can help you.

Should I defer or accelerate income?  If it looks like you’ll be in a higher tax bracket in 2014, ask if you should pull more income into this year.  Conversely, if you will be in a lower tax bracket next year, ask if you should defer income until January.  In addition, find out if you should accelerate deductions by paying any income or property taxes not due until 2014 this year.

Should I take any gains or losses this year?  If you are currently in a low tax bracket and have made gains on your investments this year, you may want to consider selling some investments to realize lower tax rates on those gains.

Should I do a Roth conversion?  If you have a traditional IRA, you may want to convert all or some of the assets to a Roth IRA, especially if your retirement is years away.  While you will pay taxes on those assets now, your earnings will grow tax-free in a Roth IRA.

Should I make any changes to my FSA or HSA for 2014?  If you have a flexible spending account or health savings account through your employer and anticipate bigger medical expenses in the new year, you may want to increase those funds to allow yourself to use pretax money for out-of-pocket medical costs.

Should I be making charitable contributions?  If you made more money this year, you may want to think about reducing your taxable income with charitable contributions.  Gifting appreciated securities will allow you to avoid the capital gains tax while still deducting the full amount of the donation.

Should I be making gifts to family?  In 2013, you can give up to $14,000 (or $28,000 if you are married and your spouse participates) to as many individuals as you want.  This allows you to assist family members while removing taxable assets from your estate.  It’s important that if you are going to be giving financial gifts, you call us before hand to discuss options available to so those gifts are protected from bankruptcy, divorce or other creditors forever.

If you would like more information about tax-saving strategies, call our office today at 720-248-7621 to schedule a time for us to sit down and talk.  Everyone’s calendars are pretty full this time of year, so call today to make sure you can get in.

Filed Under: Colorado Estate Law Information, Family Estate Planning, Small Business Education, Tax Planning ·

Pets Need Planning, Too

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Dogs in CB photoAccording to animal welfare organization “2nd Chance 4 Pets,” over 500,000 pets are abandoned each year due to the death or disability of their human companions. That’s 500,000 too many. What’s worse is that those pets could have been protected with just a little planning.

Think about it: what will happen to your pet if you become disabled? What if you’re no longer able to speak for yourself? How will the courts know what to do with your pet? And how can you make sure that your beloved animal doesn’t end up in a shelter somewhere or worse, alone on the streets? Because sadly, that happens all the time.

According to the ASPCA, only about 17% of dog and cat owners have taken the necessary legal steps to ensure their pets are cared for after they die.  Most of us assume that because our close family members know how much our pets mean to us, someone in the family will take responsibility for our pets after we are gone.  However, many pets that outlive their owners wind up in shelters because no formal provisions have been made for them.

How to Create a Plan to Ensure Your Pet’s Care

First, it is important that you let your estate planning attorney know that you have pets and that you want to make sure they are cared for. Your attorney can then explore with you the appropriate avenues for providing for your pets within your estate plan.  It is important to have a plan for your pet even if you do have, or do not want to specifically leave, money for the care of your animal(s).

While you can leave provisions in your Will for who you would like to have your pets at your death, an animal cannot directly own property or money because they are considered under the law personal property themselves. Thus Pet Trusts are the best option for guaranteed care of your animal companions.

While the majority of states have some form of pet trust statute, Colorado has one of the best statutes in the entire country allowing for Pets Trusts. Colorado’s statute was enacted in 1995 and allows for a pet trust to be either a testamentary trust (part of a will) or an inter vivos trust, one that is effective during the owner’s life thus covering the possibility of incapacity as well as death.

In either type of trust, to ensure there are proper checks and balances, you may want to consider naming one person to serve as trustee to handle the money, and another person as your pet’s caregiver, who would be responsible for the day-to-day care of your pet.

In your trust, you can detail exactly how your pet is to be treated – how many vet and groomer visits per year, what the pet should be fed, and any special medical needs that will require special attention.  You will need to fund your pet trust sufficiently to cover your pet’s anticipated life span, including a cushion if your pet lives longer and needs additional medical care.

For additional reading about planning for your pets visit ASPCA’s pet care page or learn about the Denver Dumb Friends League Pet Guardianship program.

If you would like more information about protecting your loved ones – including your pets — call our office today at 720-248-7621 to schedule a time for us to sit down and talk.

Filed Under: Colorado Estate Law Information, Family Estate Planning, Kids Protection Planning, Pet and Animal Planning, Uncategorized ·