Is Estate Planning Tax Deductible?

It’s that time of year where you are either really happy or really disappointed that tax season has recently ended.  If you are wondering what is considered tax deductible, where to spend that tax refund, or is estate planning tax deductible; this article might help. Unfortunately, after the Tax Cuts and Jobs Act of 2017, estate planning fees are no longer tax deductible.  If you are fortunate and are getting a tax refund, estate planning is a great place to put those funds to use.

Estate planning might sound like a complex and daunting chore reserved for the uber wealthy, but it’s actually a straightforward and crucial process for everyone. In its most basic terms, estate planning involves making a plan for what happens to your belongings and finances after you’re gone, or if you become incapacitated. Think of it as creating a roadmap for your loved ones to follow, ensuring they’re taken care of and know exactly how to handle your estate according to your wishes. After all, someone will have to do something with your stuff once you’re gone, and if you’re the one who takes care of it while you can, you can save your loved ones a lot of trouble and unnecessary heartbreak. Planning ahead can also make sure you are cared for in the way you want, by the people you want, if you become incapacitated.

And more importantly, proper estate planning covers more than just money and personal belongings, but we’ll discuss that further in this article.

Why an Estate Plan is Crucial

Not only do you need a plan for what happens with your finances and personal items after you’re gone or become incapacitated, but you also need an estate plan if any of the following are true:

Primarily, estate planning isn’t something you just do for yourself, it’s truly an investment you make for the people you love. If it feels troublesome to you, imagine how they would feel if they were left with an unorganized mess.

That’s why we say that estate planning is about protecting your family. It’s about protecting their time, energy, attention, and leaving them with a gift of love. It’s a way of saying “I love you” that goes beyond words, providing them with security and guidance during a difficult time. By making your wishes clear, you can keep them out of court, prevent potential issues and ensure your loved ones are supported.

We want your wishes to be honored. With an estate plan, you have the power to dictate exactly how you want to be cared for if you are incapacitated, or who makes decisions for you if you cannot. If you would not want to linger in a hospital bed for years like some unfortunate people have done before their death, you must create a plan. Otherwise, the people you love could get stuck in a court process fighting over your care.

You also get to say who inherits your assets, from your home and savings to family heirlooms. Planning ensures there is not any confusion and guarantees that your possessions end up in the right hands. Planning also makes it clear who should handle things after you are gone and makes it as easy as possible for the people you designated.

Save money and time (for yourself and your family). Dealing with the court if you become incapacitated or when you die is time-consuming, can be expensive and is public. Without a clear plan in place, you or your family may face costly legal battles and time-consuming administrative hurdles. Your careful planning now can save them from this stress and financial strain, making the process as smooth as possible. In addition, careful planning ensures that you save yourself money by avoiding unnecessary costs if you are unable to care for yourself.

You have minor children. If you have minor children, consider who is home with them when you aren’t. Would that person know what to do if you didn’t make it home? Or would the authorities show up at your house and have to take your children into the care of protective custody/strangers while they figured it out? Most parents of minor kids are overwhelmed with the demands of everyday life and don’t stop to think that estate planning applies to them. A common misconception is that planning is only for older folks who know their mortality is staring them in the face, and young parents think that’s too far off to warrant any consideration. That’s a mistake. Death happens to everyone, and incapacity can happen beforehand, no matter how old you are right now, you don’t want to leave your kids at risk.

Put Your Tax Refund to Work

Is estate planning tax deductible? No, but you might consider using your tax refund to get your estate plans professionally and safely created. Investing your refund in working with a heart centered, experienced attorney with a process in place for ensuring that your plan works throughout your lifetime is a much more prudent choice. We get to know you, your family dynamics, and your assets, and then help you choose the right plan for you both now, and into the future. Creating a will or a trust is not a one and done thing you do and then put it on a shelf or in a drawer and never look at it again. When you do that, your plan is almost guaranteed to fail when the people you love need it. In that case, it’s almost better to do nothing because then at least you have it on your to-do list.

We help you understand the law and tailor your estate plan to fit your specific needs and provide peace of mind knowing that it is complete, thorough, and legally sensible. Remember, when it comes to safeguarding your family’s future and ensuring your wishes are accurately reflected, the value of expert guidance is well worth the investment.

At the very least, an experienced attorney should help you create the relevant documents, including:

Creating a Will: A will is a document in which you detail the distribution of your assets and designate guardians for any minor children. It serves as your voice, ensuring your assets are allocated as you desire.

Setting Up a Trust: For greater control over the distribution of your assets, a trust is invaluable. It not only allows for precise management of how and when your assets are distributed but can also offer tax advantages and circumvent the lengthy and public probate process. In addition, and more importantly, a trust will help your loved ones avoid a lengthy, expensive, and totally public court process, which can cost your family significant amounts of time, energy, and attention.

Selecting Guardians and Executors: A key component of estate planning is choosing individuals who will execute your wishes and look after your children if you are unable to do so. These crucial choices help safeguard your family’s future. If you want to go beyond choosing people to raise your kids, you need a thorough estate plan, which considers anything that could happen (i.e., you’re in a car accident and they are with a carer). Proper planning ensures your children are raised by the people you want, in the way you want, that someone you’d never want to raise them can, and that the right people can get emergency care for them if you are traveling without them.

Managing Taxes and Expenses: Effective estate planning can significantly lessen the tax load on your beneficiaries, allowing a larger portion of your assets to benefit them directly instead of going towards tax settlements.

These are all undoubtedly important, and what most estate planning attorneys will do for you. However, our firm would like to go a bit further, ensuring that investing your tax refund in an estate plan is the absolute best investment you will make all year. We can help do this by:

• Empowering you to choose the right plan that fits your unique family situation, values, and budget (most lawyers will tell you what you need);
• Ensuring your assets are inventoried and don’t end up lost (most lawyers won’t tell you that this happens – a lot – to the tune of billions of dollars every year);
• Creating a comprehensive plan outside of your will for what happens to your kids if something happened to you (this can be overlooked);
• Being a trusted advisor for your family, so they have someone to turn to for help when something happens to you (some attorneys don’t check in with your family after you’ve completed your estate plan);
• A design for updating your plan at least every three years to make sure your plan stays up to date so as your life changes and the law changes, your plan works when you need it to (most lawyers treat their clients as a “one and done” transaction, never checking in again and letting your plan go stale). We have implemented a legacy care program to help you stay current.

Didn’t Get a Tax Refund This Year?

You may be thinking it is too bad you didn’t get a refund this year. Know these two things: 1) Estate planning is always a wise investment whether you get a refund or not; and 2) At Tritch Buonocore Law we can help you organize your finances so you are more likely to get a refund next year, or at least not have a big unexpected tax bill, if that’s what happened this year. Our team will also help you get more financially organized than you have ever been before, so that you make the best decisions about the allocation of your resources for yourself and the people you love.

Estate Planning: Money Well Spent

Among all the ways to use your tax refund, estate planning with us ensures that your love and care for your family endure long after you’re gone. It is an act of foresight that not only secures your family’s financial future but also leaves a legacy.

At our small and personal law firm, we will work with you to create a complete plan that is worth more to your loved ones than your tax refund will cover. To learn more about how we might be able to help you, please call to schedule a complimentary 30-minute meeting for new clients. Alternatively, you can fill out our form online and be contacted by one of our capable staff.