Financial Advisor 101: Vacation Budgeting

It’s almost summer but vacation season really begins now: Memorial Day Weekend.

The grills come out. The bags are packed. The beach hotels are full. The gas tank is filled. Everyone is in vacation mode. The next three months will have millions of Americans spending billions of dollars taking time away from work.

Speaking of billions of dollars, you don’t have to spend a ton of money on your vacation if you plan it right. In fact, using tried and true methods, you can budget your time away and have it paid off, even before you leave.

Here are some financial tips to save on your vacation:

  1. Get a Travel Card from your bank: Every major bank has a card that you can use for vacation. You can transfer funds to it and take it with you. If it is lost or stolen, you just report it and it will be canceled. You won’t lose money. Plus, it keeps you honest. If you have $1,000 on it, you will try to keep within that number when vacationing.
  2. Stay at a vacation rental of Air BNB: Hotels typically hike their rates during the summer so you could spend $250-$450 a night at a resort or middle-class hotel, depending on the location. That means you could spend upwards of $1,500 for six nights at a hotel. That could be a budget buster. Instead, load the VRBO app (Available at https://www.vrbo.com.) Using this app, you can find vacation rentals which are in people’s homes and spend, instead, around $75 per night. A huge difference in savings!    
  3. Flight prediction apps: We all know there are better and cheaper days and times to fly. (Tuesdays and Wednesdays, typically.) You could spend $850 on a roundtrip flight to San Francisco that leaves on Friday or save money and leave on a Tuesday but spend only $375. Load the Hopper app to your smartphone and save. This flight prediction app gives you the best days and times to fly. It also tells you when flight fees go up or down. Once you see the cheapest ticket, you buy it. It is simple and saves you a lot of time, too.
  4. Eat where the locals eat: Of course the tourist trap restaurants will be pricy. They have a captive audience who is looking for convenience. Instead, find out where the locals eat. Go to Yelp and Chowhound.com to see the restaurants locals like. Also, ask for recommendations from people you meet.
  5. Meet with your financial advisor before you leave: Your licensed and experienced financial advisor can help you budget and also make money-saving recommendations.

Here at A.K. Burton, PC we wish you a summer vacation for the books! Contact us at (301) 365-1974 or info@cpa-maryland.com. We serve the Bethesda, MD area.    

Tax Preparation 2020: No Time Like Now to Make next Year’s Returns Easier

Tax Season 2019 is over.

Yay!! Taxes are filed! Time to party and enjoy life until next April, right?

Wrong.

Well, yes, you could procrastinate doing your tax preparation like millions of other Americans. Out of sight, out of mind. That works for some folks, but not for others. Often, that means delaying the inevitable. You hope that the mistakes you made on your returns will not be repeated next year.

tax returns AK Burton

There is a better way. Here at A.K. Burton, PC, we specialize in helping our clients tax plan. Even if it seems overwhelming and you don’t know where to start, we are here to help you. We can help prepare now, this year, to get your tax plan in order and get ahead of the game. Here are several ways you can prepare for next year’s tax return now:

  1. Plan your tax write-offs: You have old equipment (mowers, tractors, espresso-makers, computers, cars, etc.) that needs to be replaced. Now is the time to plan on purchasing that equipment to use in your business. However, before you purchase the new equipment that is high-dollar, check with your financial adviser on the tax benefits of the items.
  2. Set up estimated tax payments: When you filed your 2018 taxes this year, your accountant may have advised you to begin paying your estimated tax bill for 2019, now. Depending on your 2019 projected income and withholdings, your accountant may give you estimates for federal, state, and local taxes. Pay attention to your payment options.  For a federal estimated payment, you can register and pay online at www.EFTPS.gov or you may have the option of sending payments by direct mail. You may be advised to pay monthly or quarterly. Paying ahead and lessening your burden (or erasing it altogether) by April 15, 2020, is a guaranteed way to get ahead. If you need to generate estimated payments for 2019, AK Burton PC provides this service.
  3. Make changes to your withholding: If you had a child, got married, got divorced, adopted a child, purchased a home, or made other life changes, you may need to adjust your withholdings from your pay. If so, file a new W-4 with your employer. Many of our clients seek our advice on this topic. Choosing the wrong number of allowances can lead to an unwanted surprise when filing your taxes.
  4. Give more to your 401k: You may not be working all your life. You may have plans to retire one day. If so, then put more money into your company or private 401k account. You can contribute up to $19,000 each year now, excluding catch-up contributions. If you’re interested in maximizing your retirement and minimizing your tax liability, A.K. Burton, PC is here to help you.
  5. Re-examine your business structure: “Business as usual” is not always a smart strategy. Becoming an LLC, S or C Corporation may be an upgrade that you need. Check with your tax adviser for the designations which may benefit your tax strategy. At AK Burton, PC we take the time to understand our small business clients and maximize tax strategies such as restructuring.
  6. Stop procrastinating! Whether your business has just begun or has been around for several years, there are evolving tax strategies to consider. Stop procrastinating and make the changes now. It takes time, and you may have to make some adjustments. But in the long term, it will be worth it for you, your business, your clients, and your family.

Here at A.K. Burton, PC we specialize in tax planning and strategies. We provide the services that our clients need in an ever-evolving work and regulatory environment. It is our mission to use our expertise to help our clients achieve the best results possible for their unique circumstances.  Today is the day to begin that strategy. Contact one of our tax advisers at (301) 365-1974 or email us at info@cpa-maryland.com. We serve the Bethesda, MD and the Washington, D.C. area.

New Tax Laws You Need to Know as You File Your 2018 Tax Return

It’s the day of the year that makes millions of taxpayers nervous, thousands of IRS employees happy and ALL accountants work overtime.

And, all three of those groups should know that tax laws change year to year. There were major changes passed by the U.S. Congress and signed by President Trump last year that all taxpayers and business owners should know.

Here are some new tax laws (2018) that you should keep in mind as you file your taxes in 2019:

  1. Standard Deductions increased: Married and filing jointly increased from $13,000 to $24,000. Single taxpayers and those who are married and file separately have an increase from $6,500 to $12,000. Heads of households went from $9,550 to $18,000.
  2. Personal Exemption: The $4,050 personal tax exemption has been eliminated.
  3. The top income tax rate changed:  Individuals with incomes of $500,000 or higher will be at the new 37 percent top rate. Those filing jointly at $600,000 or up and married will be at the top rate. (The top tax brackets are found here.)
  4. Child Tax Credit: It is now worth up to $2,000 per qualifying child. The age cut-off is still 17. (Children must be under 17 at the end of the year to claim the credit). The refundable portion is now only $1,400. The earned income threshold for the refundable credit is lowered to $2,500. Phase out for the child tax credit increases in 2018 to $200,000 ($400,000 for joint filers). The phase out applies to the new $500 credit for other dependents. (Child must have a valid SSN to qualify for the $2,000 Child Tax Credit.)
  5. Home Equity Loans: It limits the deductibility of mortgage interest up to $750,000 of debt used to buy a home. It also does not allow deducting the interest on home equity loans
  6. Moving expenses eliminated: Once, over a million taxpayers claimed this deduction. This exemption has been totally scrapped. Only member of the military on active duty can claim this deduction.
  7. Tax Preparation Fees are eliminated: Fees you paid to your accountant or tax preparer were once combined with other miscellaneous deductions and deductible to the extent the total exceeded 2% of your adjusted gross income. Unfortunately, this deduction has also been deleted.
  8. Job expenses: In the past deductions for licenses, medical tests, tools, clothing and equipment were deductible. They can only now be deducted by the employer.
  9. Parking and transit fees: Up to $255 per month from their employer towards parking and transit costs were allowed. Employers could also deduct these reimbursements, which were also tax-free to the employee. Employers can no longer deduct these reimbursements.

So, as you can see, filing your individual, married or business taxes from 2018 will look much different than they did in the past. Many of these changes will make filing less complicated for some and more complicated for others. If you are unsure of what you can claim, consult your licensed tax accountant or tax adviser.

A.K. Burton, PC, has experienced and licensed tax advisers who are quite knowledgeable of the 2018 tax law changes. They can assist you or your business in filing your taxes and also represent you to the IRS. We serve Bethesda, MD and Washington, D. C. Contact us at (301) 365-1974 or info@cpa-maryland.com.  

Small Business Accounting Advice: Avoid Red Flags That May Lead to an Audit (Continued for 2019)

It’s not a pleasant topic. Business owners hate them. Accountants despise them.

We are speaking of small business accounting audits, of course. We blogged about this topic in 2016. It can be one of the most agonizing experiences of your life. Certainly, and we are being candid here, it is not enjoyable or without its stresses.

The good news is this: According to the IRS, just over 1 million individual income tax returns were audited in 2016. That is only a 0.7% tax audit rate which is the lowest in more than ten years.

There are three types of IRS audits:

  1. Correspondence (letter): information requested through the mail
  2. Office audit: visit the IRS office for the audit
  3. Field: IRS agent comes to your business to perform the audit.

So, no matter how you are audited, the likelihood of you or your company being audited are pretty slim.

However, if your tax returns have some “questionable” records, you may see the IRS auditor looking at you through the peephole early on a Saturday morning. Here are some red flags to avoid so you won’t be audited:

  1. File late consistently: If there is any tax filing behavior that will get you in trouble, it’s filing late, year after year. The IRS begins to wonder why it takes you so long to file even though you know it is due in April every year. Be smart: start working on your tax documents and records in January. File them by April 15 or, better yet, before that date.
  2. A large number of deductions: Tax deductions allowed by law are fine. However, a large number of deductions for a small business may draw some suspicion. Instead, be consistent on your deductions. Do the same ones each year, if appropriate, for your returns. The IRS has a rule for deductions: They must be ordinary and necessary in your type of business.
  3. Excessive business vehicle use: Claiming 100% business use of a vehicle will bring the magnifying glass from the IRS. Instead, use the IRS standard mileage rate. Don’t deduct both the business use and mileage. Don’t claim 100% business use unless you can prove that by showing every single business trip you made.
  4. Failing to report taxable income: HUGE MISTAKE. Small business owners are required to report all of their income. Don’t ever hold back on income reporting.
  5. Schedule C Filings: A schedule C Form 1040 allows sole proprietors to take deductions. You can deduct items like monthly cell phone bills, home office space, website subscriptions, and other items. It may get you audited if your items are questionable.
  6. Donations in large sums for charity: We all appreciate businesses which donate to charities. It is a noble practice. However, a large sum that is given to non-profits might appear suspicious to the IRS. A common practice of some businesses is to give lots of money to charity to avoid paying taxes on it.
  7. Unusually high salaries for employees: Be careful that you pay reasonable salaries. High-income earners who are also shareholders may bring questions from the IRS.

No one wants to be audited. The IRS probably doesn’t like to do it either, as they are costly and require extra labor. It’s not a positive experience for anyone involved. So, avoid these filing red flags and do your best to file your taxes. It will decrease stress and costs, for sure.

If you need small business accounting help and guidance, contact our experienced tax advisor team at A.K. Burton, PC. We provide the services that you need. We can advise you, talk to the IRS for you, handle your IRS tax correspondence, and help you file your taxes accurately and efficiently. Taxes can be overwhelming, let us make it manageable. We serve the Bethesda, Maryland and Washington, D.C. area. Call for an appointment at (301) 365-1974 or email us at info@cpamaryland.com.  

Why Hire a Financial Advisor?

We all try to do things on our own and, sometimes, we accomplish what we want to do.

After all, the internet is a limitless vault of information. You can find out how to self-treat a medical condition, cook a complicated meal or teach a difficult concept to your children. The resources we have now were not even a dream barely a decade ago.

man with his head in his hand - purple effect

However, even the internet has its limits. You can’t do surgery or play outdoors or hug your spouse through the internet. Thankfully, we still need other humans for certain activity.

It is also that way with financial advice. You can look up any financial advice you want on the internet, join a financial Facebook group or subscribe to a newsletter. They may help you with current trends or personal experiences, yet, they cannot give you full, unbiased advice that you need for your financial situation.

In fact, they may even give you the wrong advice which could cost you dearly.

Furthermore, financial advisors are not that expensive. According to www.NerdWallet.com, the average financial advisor costs between $1,000 and $3,000. That is a paltry amount compared to the losses you could experience.

Sometimes, you need to meet with someone who can analyze your finances, hear your goals and give you a plan for the present and future. Here are three reasons you should consult an experienced financial advisor:

  1. Your financial future is too important: The market place has seen enormous highs and lows in the past ten years. The United States economy went through a long, damaging recession. People who had their investments in trendy products lost thousands even millions of dollars. Also, people who didn’t plan for a downturn at all suffered greatly and may still be recovering. We see clients who may have invested based on what they heard about on television or read on an internet forum or website. Unfortunately, their finances were damaged deeply. You and your family can be protected by realizing that investing, budgeting and accounting, whether personal or business, need the advice of a trained and experienced financial counselor. Smart financial decisions made now may positively affect you and your family or business for years to come.
  2. An impartial third party is needed: Sometimes when we are deep into something we don’t see potential issues or future problems. It’s like the old cliché: “You can’t see the forest for the trees.” Finances are a common example of partiality. You have a spending routine which seems normal but when examined by a financial advisor, it could be costing you, dearly. An impartial, experienced financial advisor will spot the excesses, missteps, and dangers ahead for you and steer you in the best direction. If you’re lucky, you may get affirmation that you are also doing some things right. The bottom line is this: We all need direction and a financial advisor works with you to make a plan that’s best for you.
  3. Dealing with money is a pain: “I hate dealing with money and I need you to do it for me!” That is a popular refrain from clients. Payroll, budgets, taxes, accounting, bookkeeping, inventory…the list seems endless and to many, too time-taking and tedious to do on a regular basis. They become frustrated and angered from dealing with it. A financial advisor can either recommend an accountant or they may have a license to do it for you. If you have a busy life and have no desire to do it, hire a financial advisor to do it for you. They love this stuff and can take it off your hands.

Your investments today power your future tomorrow. How do you know what’s the best investment for you and your family? A licensed, experienced financial advisor can give you professional advice based on your unique finances. If you haven’t hired one, now is the time. Your family’s economic future is too important.

The financial advisors at A. K. Burton, PC of Bethesda, Maryland, can help your family and your business make smart financial decisions. We will listen and work with you. Call for an appointment at (301) 365-1974 or email us at info@cpamaryland.com.  

How Small Businesses Can Save for the 2018 Tax Bill

If we’ve heard it once, we’ve heard it a hundred times: “I cannot believe how much money we have to pay this year for business taxes.”

That is a sad refrain but one that is all too common. Small business owners fail to save money for their previous year’s tax bill and get slammed the following April. Then, they are in debt to the IRS. Thus, begins a vicious cycle.

Your small business taxes could cause you problems for you the next year. But there are smart ways to save to pay your tax bill.

According to www.smallbizdaily.com:

Don’t let it happen, year after year. A smart small business tax strategy can be implemented by you and your CPA and/or financial advisor.

The biggest concern for small business owners is taxes. Almost half (45%) of small business owners in the survey say taxes are a major worry for 2018, and 30% say tax laws had a negative effect on their business last year.

Now is the time to develop a smart, small business tax bill paying strategy. Here are five ways small businesses can save money from their earnings and pay all or some of the tax bill owed from 2018:

  1. Take a percentage out of each check and save it: This is the simplest and easiest way to save. Call your financial advisor or accountant and find out what percentage you can expect to pay this year. Here at A.K. Burton, PC, we can give you an estimate using your tax returns and your current earnings. From that amount, you can figure a percentage you can use for deducting from each paycheck. For instance, if you paid 30% taxes last year, take $30 from each $100 that you make. Then, deposit that in a separate bank account and don’t touch it.
  2. Pay the IRS in installments: The Internal Revenue Service (IRS) accepts payments, year-round, of taxes owed. Your small business accountant can create estimated payment installment coupons for you to use quarterly. You send them in once you have the amount to pay. Just keep in mind, even if you have more or less than the installment amount, you can still send it in. Every payment reduces your amount due on April 15. Pay what you can. It will be a relief.
  3. Do an SEP (Simplified Employee Pension Plan): SEP is a tax-deferred retirement savings plan. It is specifically for self-employed and small business owners. Using a simplified employee pension plan, a small business owner makes tax-free contributions to an IRA (individual retirement account) for each employee. SEPs are funded only by the employer using tax-deductible dollars. (Roth or post-tax contributions are not available in this plan.) Employers may contribute up to 25% of each employee’s annual compensation. Self-employed persons may contribute up to 20% of their net self-employment earnings towards their own account.
  4. Hire a CPA, EA or a Financial Advisor: Let’s face it: running a business is a heavy-duty job and takes many hours each day. Small business accounting also takes a lot of time and effort. Save yourself some time and effort. Hire a licensed Certified Public Accountant (CPA), here at A.K. Burton, PC. Then, have us figure out a tax-strategy, implement it in your accounting program and monitor your company during the fiscal year to make sure it is working or if it needs adjustments.  

January is only a few weeks away. Even with the end of the year so close, you can make all these changes before your New Year’s eve bash. Yes, it can be done that quickly.

Before you make any moves, you may want to consult the experienced and licensed financial advisors at AK Burton, PC. Our CPAs serve the Washington, D.C.metro area including our office in Bethesda, MD. We can meet with you and your staff to plan a coherent and effective tax strategy. Contact us at (301) 365-1974 for more information or email info@cpa-maryland.com.

Seven Reasons to be Thankful for Your Financial Advisor

Thanksgiving is almost here. You’ve invited family, friends, and in-laws. The food is ready to go and it’s holiday time!

There are many reasons to be thankful: for good health, better employment, a new addition to the family, or just knowing you have made it through another year with challenges. You’re making it! Whether it’s been a great year or terrible year, we can always reflect on our lives and find something in which to be thankful.

financial advisor 3 AK Burton

During the holiday season, we are all so busy wrapped up in what we’ve got going on that we overlook many of the more subtle reasons to be thankful. Let’s take a moment and be thankful for the accountant or financial advisor for your business. Here are seven reasons be thankful:

  1. Help in setting up your business: Financial advisors are experts in small business start-ups. They have the knowledge and experience in applying for LLCs (or other legal designations), creating a business plan and giving budgeting advice.
  2. Small business regulation: No business owner wants to deal with federal, state and local regulations. They are time killers and extremely frustrating. Financial advisors can update you on current regulations, labor laws and OSHA requirements. Small business accountants can relieve you of the burdens of regulatory research. You will get the list and advice on any and all regulations affecting your small business.
  3. Auditing your business: Speaking of burdens, keeping track of your income and expenses can also be agonizing. You’d rather read “War and Peace” than personally audit your business books. It’s a common feeling and understandable. Accountants bring an unbiased eye to your books. They can audit them and give you a concise report. Plus they can help you head off any accounting dangers at the pass by correcting issues and getting you on the right track.
  4. Tax savings: The IRS is constantly changing tax laws. It can be confounding, even for accountants! However, it’s our job to be on top of all changes and to apply those changes to your tax returns. Financial advisors not only know the current tax laws, but they help you legally reduce your tax bill. They may be able to save you thousands of dollars. But even if it’s a few dollars, at least you aren’t paying it to the government! That is a win no matter how much you save.
  5. Correct tax payments: Taxes. They are a pain but they have to be paid. You want to make sure you pay the right amount on time. Whether you’re self-employed or unsure if you’ve withheld enough from your paycheck, we’ve got you covered. At A.K. Burton PC, our accountants review all your pertinent information and create estimated tax payments. These estimates tell you how much to pay and when.
  6. Offload the work: Any smart business owner who has employees or subcontractors, has to offload work in order to make money and accomplish business goals. You can’t do it all yourself. Hiring accountant who specializes on your business’ financial side, gives you time to focus on all the other tasks you can never seem to get to.
  7. Buying or selling your business: You may be investigating the purchase or merger of another business. It may take your business to the next level. There are many financial aspects to consider. Your financial advisor can take you through each step and work with your attorney in buying or merging the business.

Running a successful small business is both a joy and a pain. Our financial advisors at A.K. Burton, PC can eliminate some of that pain by meeting all of your small business needs. And for that, you can be thankful. This holiday season at A.K. Burton, PC, we are thankful for our clients and serving you. Happy Thanksgiving!

A.K. Burton, PC, which serves the Washington,D.C. and Bethesda, Md area, has experienced and licensed financial advisors who can help you make sense of your small business bookkeeping. Contact us at (301) 365-1974 for more information or email info@cpa-maryland.com.

        

      

Not too late to Plan: Year End Tax Planning

Fall is a beautiful time of year. Holidays are around the corner and taxes are the last thing you want to think about. However, certain events can drastically change your tax liability. Now is the time to plan for these changes so that a large tax bill doesn’t sneak up on you.

Just like the leaves changing, things change during the year.A  job promotion, new job, retirement, adding a new family member, or maybe an inheritance are some examples of significant events that may impact your taxes.

tax advisor AK Burton

Here are a few reasons to contact us at A.K. Burton PC for tax planning services:

  1. A change in employment. Any change in your earnings should have you reaching out to our office to discuss the best course of action. For example: when hired, you fill out form W-4 to set your allowances. Do you want one, two, or what does allowances even mean? By discussing the matter with us, we analyze and make the best decision with you.
  2. Form of compensation. For example: a change in how your money is earned such as from an employee earning income that is reported on form W2 to an independent contractor being compensated by form 1099-MISC triggers a significant tax event. Contact our office to discuss the steps that you need to take as an independent contractor. One of those steps is making estimated tax payments based on your income.
  3. Retirement. If you’re looking at retiring it is essential to contact our office and discuss what the change in income will be and what steps you’ve taken so far in the process. There are many options concerning your retirement and tax liability. Be especially cognizant of required minimum distributions once you turn 70 ½ years old. These distributions are required and the withholding that has been set up in the past may not be enough to avoid a tax liability. Contact our office to plan ahead and work to avoid unnecessary surprises.
  4. Capital gains. A large gain from an investment may trigger a nasty surprise depending on your tax bracket and other income. Any significant change in investment income should be discussed with your tax adviser.
  5. Investment property. There are many taxable situations that occur when dealing with a rental property. Many tax rules are not understood by other professionals to the extent of our staff’s knowledge. Before making the decision to sell that condo you’re renting out; contact our office and double check what tax consequences may ensue. It only takes minutes to shoot us an email or give us a call. You’ll be happy you did.

These are only some of the reasons to engage in year end tax planning with your tax advisor. Any significant change in your life should be discussed with your advisor as soon as possible. Year-end tax planning is a great way to wrap up the year and prepare for filing your taxes. At A.K. Burton, PC we specialize in year-end tax planning because it is a service our clients consistently rely on.

A.K. Burton, PC, which serves the Washington,D.C. and Bethesda, MD area, has experienced and licensed individual financial advisers who can help you with your year-end small business tax preparation. Contact us at (301) 365-1974 for more information or email us at info@cpa-maryland.com.

 

Ask your Financial Advisor: Is an LLC the Right Fit for my Small Business?

Fall is here. Leaves are falling. Pumpkins are out. Halloween Costumes are on sale. Bags of candy are available. Coffee shops are offering pumpkin spice latte’.  

What a great time to get an LLC for your business!

Okay, maybe there is no correlation with fall. But, it’s still a great time of year to set up and LLC. Let me explain: Tax Year 2018 ends December 31, so there is still time to get it done and affect your tax returns for good, perhaps.  

small business LLC AK Burton PC

First, let’s explain what an “LLC” is: An LLC (Limited Liability Corporation), according to www.Chron.com, is “owner’s liability protection against company actions and debt similar to a corporation. However, a LLC’s management can be set up as a corporation or partnership for management flexibility and taxation purposes.”

Second, the benefits of having your small business LLC designation are quite attractive:

  1. Have your taxes withheld throughout the year: Instead of having to pay a lump sum at tax time or installments throughout the year, you can have your taxes withheld throughout the year. An LLC gives you the option to have a “Flow-through Entity” meaning you become an employee of your company and pay taxes from each paycheck.     
  2. A “One-person LLC Form”: Your business is taxed as a sole proprietorship. This adds limited personal liability exposure but keeps crucial tax benefits such as the owner compensation with “distributions of profit” taxed at the individual owner’s lower marginal tax bracket (tax rate applicable to the next dollar of taxable income earned); and pass-through of business losses to the owner.
  3. Estate Planning: An LLC can also be placed in a Living Trust. This can be complex so consult with your tax attorney.
  4. Less paperwork: An LLC is less time-consuming once you have completed the forms and filed them. The money will be taken out of payroll. Fewer headaches and less paperwork means you can tend to your business.

If you decide that an LLC is the best move for your small business, you can file the forms, called “Articles of Organization”, in your state. Filing fees range from $100-$500.

Before any major financial or business decision like filing Articles of Organization to set up your LLC, give us a call. We will consider your unique needs and discuss if an LLC suits you. A.K. Burton, PC specializes in helping our small business clients structure their business to maximize benefits to the parties involved. Having an attorney/CPA on staff allows us to give our clients the most value for their money spent. Even after we have set up your business, we are always serving your business needs.

From filing the paperwork to form your business, filing taxes, business advice, and closing your business; we are a one stop shop. We serve the Bethesda, MD and Washington, D.C area. Contact us at (301) 365-1974 for more information or email us at info@cpa-maryland.com.  

Estate Planning under Siege: How to resolve estate issues with family members

You’ve heard the stories, or even worse lived through it. Family members fighting each other for the inheritance of their deceased parents. Fights over homes, cars, jewelry, clothing or even, pets ensue.  

These spats get so nasty that the heirs get ‘lawyered up” and take their siblings to court. Sometimes these legal disputes span decades and end up in the national news. Remember the infamous Anna Nicole Smith/J. Howard Marshall case? Other infamous inheritance cases such as Howard Hughes, James Brown also come to mind. a man's hand with a silver pen writing "My Last Will..."

Granted, these are sensationalized court cases; however, they highlight the necessity of estate planning to “regular people”, like us. If your family doesn’t get its arrangements in order, they may have a messy and regrettable experience, too.

Estate Planning may not be a topic you want to discuss, but it is one that every family needs to have. It doesn’t matter what you may be worth or what possessions you may own. Here are a few steps that you can take to avoid probate (and hopefully hard feelings among your heirs) which could last a lifetime:

  1. Leave a list of personal property: Your cars, home, clothing, jewelry, artwork and any other pieces of property that you own needs to be itemized. Then, next to each item of property, put the name of who you want to have it. You may even want to put a sticker with the name of the person on each item to help keep track of who gets what.
  2. Open a line of communication with all heirs: Ask them if they want anything in particular. Keep a record of the conversations and make a list of specific requests.
  3. List any gifts or loans to family members: Parents may make loans or give gifts to children to help them through difficult times. List the names of the children and the loans and/or gifts that were given them.
  4. Avoid joint ownership: In this case, “joint ownership” is where a child jointly owns assets with their parents. An added beneficiary (such as real estate) exposes the parent donor to the co-owner’s liabilities and limits the donor to change his mind in the future.
  5. List spouse as primary and sole fiduciary: Your husband or wife should be the first and primary fiduciary.
  6. Balance needs of spouse and children: Your family members have different needs. One strategy is to assign most of the life insurance money to your spouse, while other property items (i.e. autos, clothing, etc.) go to your children.Consider your individual family member’s needs upon your death to achieve the best balance possible.
  7. Transition the family business: You can gradually hand over the family business while you and your spouse are still alive. Think about grooming your successors by giving them more responsibility and authority.
  8. Keep estate planning confidential: Your finances are your business only. Avoid discussing your estate plan at a dinner with friends or posting plans on social media. Also, don’t give a copy of your estate plan to your children or grandchildren. Once you share your plan, any changes you make to it may be questioned. Avoid the drama. Life changes and with those changes, your estate planning. Only you, your spouse and your estate lawyer should discuss your estate plans.
  9. Make funeral arrangements: Choose where you and your spouse will be buried, the funeral program, interment plans, and other detailed funeral instructions. If you’re choosing to be cremated, iron out all the details and make a clear plan for your remains. These arrangements will save a lot of headaches and embarrassment for your heirs.

You have seen what happens when estates aren’t planned well: family fights, hard feelings, embarrassment, fraud, and litigation. All of these outcomes can be avoided with a solid estate plan. Estate planning is a difficult task and easier if you don’t procrastinate. Don’t delay any longer!

A.K. Burton, PC, which serves the Washington,D.C. and Bethesda, MD area, has experienced and licensed individual estate planning advisers who can help you create a will that will meet you and your family’s needs. Contact us at (301) 365-1974 for more information or email us at info@cpa-maryland.com.