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Estate Planning

Nine Reasons to Do Estate Planning in 2021

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This year, we have experienced the unexpected. 

COVID-19 (Coronavirus) has ripped through the fabric of our nation, wreaking havoc on our lifestyle. Even with a vaccine just being released as we write this blog, there will still be a time of transition and readjustment. ***

This transitional period is the perfect time for you to re-examine your estate. In our busy lives today, it is easy to prioritize other items and let estate planning slip to the bottom of the list of things to do. The pandemic has provided a time-sensitive reason to prioritize estate planning back to the top of the to-do list. There is a lot outside of our control these days. One thing you can control is making sure that your loved ones are provided for with estate planning. 

Here are some tips on estate planning as we enter 2021: 

  1. Life and Disability Insurance: If you have insurance, be sure to update your beneficiaries. If you don’t have life insurance or disability insurance, then buy some this year. Your employer may provide it. If not, research local insurance agents and brokers to see the best policy for you. This is a crucial decision because when you die, you are leaving funds for your spouse and loved ones to pay funeral expenses and other bills. 
  2. Pet Care: Have someone designated to walk and feed your dog or cat. Provide a key and vet name. 
  3. Funeral and burial arrangements: Make your specific funeral service wishes known, including who you want the eulogy, speakers, music, pallbearers, etc. Also, have your burial plot chosen and purchased. 
  4. Retirement accounts: Your beneficiaries should be updated so your savings and investments go to the right person. 
  5. Bank accounts and investments: Your bank should provide a “Transfer on Death” beneficiary of your accounts. Following your death, whoever you have chosen will automatically receive the account. It is good for smaller accounts and assets. 
  6. Digital assets: Someone should be designated to handle your email accounts and any other online accounts such as social media and websites. Have your Financial Power of Attorney keep all your user names and passwords in a file. Keep them updated when you have changed any of the passwords or closed any account. 
  7. Have a “Family Convo”: Get together with all of your immediate family and discuss what happens if you get sick or die. Make arrangements for your spouse and children. Give them the names of your power of attorney and any documents they may need for future arrangements. 
  8. Health Care Directive: Make your final health care plans known to your loved ones. If you want a DNR (Do Not Resuscitate) write it down. That and any end-of-life care needs should be expressed clearly.
  9. Last Will and Testament: This may be last on the list but it should be first on yours. Create a will that spells out specifically any and all property and who should get it.  

One of the best gifts you can give your loved ones is security. You reduce intra-family fighting, lawyer expenses, and hard feelings by covering all estate issues before you die. Your family will be grateful to you forever.

At A.K. Burton, PC, our experienced estate planning advisors can help you through every step of the way. Call us at (301) 365-1974 for a consultation. Our office is open! We serve Bethesda, Rockville, and Montgomery County. MD area.

*** For more information on how COVID-19 has affected Americans’ finances, see this Forbes magazine article.

Estate Planning, Family Finances, Financial Advice

Plan on Estate Planning in 2020

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Next year is almost here. In just a few weeks, 2020 will arrive. Are you ready?

Yes, it is an election year. It is a leap year. It is a new year to plan and move ahead with those plans. 

Should it also be your “Estate Planning Year”? Yes. As hard as it may be to think about, let alone talk about dying and what happens with all our stuff when that happens… it is a fact of life. 

So, while we have covered the topic of estate planning in other blogs, it is a subject that is worth revisiting. As this year winds down, you can act now to plan for your estate and help protect your family and loved ones. 

As you sit down with your trusted financial and estate planning advisor, keep these five points in mind:

  1. Life Insurance: There was a popular radio commercial about life insurance many years ago that said “Life insurance isn’t for the deceased. It’s for the living!” It seemed like a trite, non-sensical statement but it is so true. Life insurance is primarily used to protect a loved one from loss of income when the spouse or family member dies. Life insurance is a tax-free income that the beneficiary may use for income and expenses. If you’re not sure where to begin with life insurance policies, go to www.consumersadvocate.org/life-insurance/ for the latest reviews.      
  2. Beneficiary Designations: Life insurance, 401(k)s, IRAs and personal property all will be owned by someone upon the owner’s death. So, designate beneficiaries for all of these items. Review and update those beneficiaries every few years. Backup beneficiaries can also be named should the first beneficiary pass away.
  3. Charitable giving: Non-profit organizations receive billions of dollars each year from the generous giving of estates. Legacy giving is popular for churches, temples, alma maters, non-profits, civic groups and other legally designated 501 ( c ) 3  organizations. You can also discuss with your financial advisor the advantages of setting up a CRAT (Charitable Remainder Annuity Trust). 
  4. Form a Trust: Discuss with your estate planning advisor revocable or irrevocable trusts. Discuss your wants and needs and find out if one of these options matches your goals for estate planning.                             
  5. Reduce debt load: Pay off your debts! It is that simple. Your estate may end up paying those debts off which means leaving less for your heirs. Begin now at paying off credit cards, liens, and loans. 

Why work on estate planning now when there’s always tomorrow? It’s a lot of work! Truth is, making an appointment to start the estate planning process, making a plan, and then working towards that plan will set you and your family up for success! Don’t wait, act now. 

A.K. Burton, PC, has an experienced estate planning advisor and attorney on our staff who can help you do it all. We can begin now and take you through the entire process, professionally and compassionately. Contact us at (301) 365-1974 to schedule a consultation. Our accounting firm serves the Bethesda, Rockville, and Montgomery County, Maryland areas.    

Tax Advice

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

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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.