Estate Planning Considerations For Seniors This Tax Season

As the April 15th tax filing deadline looms closer, so does the window of opportunity to take advantage of certain tax strategies. As a senior, you may already have a comprehensive estate plan in place.

Did you know, however, that estate planning and taxes can go hand-in-hand?

One of the keys to successfully filing taxes and effective estate planning is being proactive and prepared. To help you feel as prepared as possible this tax season, we want to share with you a few important estate planning considerations.

First, it is important to understand that uncompensated gift transfers can penalize you in the future, especially when long-term care planning is concerned. Did you know, for example, that any amount of money transferred within a sixty-month window prior to needing care without adequate compensation can disqualify you for public benefits? While a benefit of leaving monetary gifts to loved ones is that it can help you avoid the transfer of money at death, it is important to talk to your estate planning attorney about whether lifetime gifting is the right planning option for you.

We know that many people plan to leave large amounts of money to loved ones upon their death through estate planning. For many seniors, gifting high dollar amounts should be a carefully thought through planning decision. Younger recipients, for example, may have divorce, bankruptcy or incapacity issues that you may not be aware of. Before you commit to giving your chosen recipient the funds, it is important that you feel comfortable that the person is responsible enough to receive the gift. An alternative option is to discuss the benefits of a structured gift program with your estate planning attorney.

Finally, it is important to regularly review your estate planning documents to make sure they still coincide with your wishes, goals, and needs. Try to stay informed about any updates to the tax laws in your state so you can be on top of any changes that you may need to account for when filing.

We know you may have questions about this important and complex topic. Do not wait to contact our law practice to ask your questions and get the help you need to support you now and in the future.