Financial Planning > Tax Planning

6 client tax issues advisors should address

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As financial professionals, it’s good to stay up to date and talk with clients about the renewed tax rates and exemptions and how they may affect their individual situation. Here are a few areas to touch on with your clients:

  1. Plan of distribution — Talk with clients about what they want to happen when they die. Who do they want to get their house, money and the grandfather clock? Make sure financial accounts correctly address those wishes, and have an attorney help with other assets.
  2. Appointments — Make sure the clients have talked with an attorney on who they want to appoint to administer their estate. Note in your files who this person is and how to contact them.
  3. Probate avoidance — If clients have assets that will go through probate, they should talk with an attorney on how much it will cost and how long it will take. A living trust may be the ticket to saving substantial attorney fees and to help speed up the process.
  4. Illness — Every good estate plan includes health care directives and powers of attorney to name an agent to handle matters if a client become too sick to do so. Make sure you have these up-to-date documents on file as well.
  5. Income taxes — Retirement accounts like IRAs, 401(k)s, 403(b)s, etc. many times have never been taxed and if clients don’t deal with it now, somebody will. There are laws and strategies in place that allow for creating income tax-free dollars so that families can inherit an amount that is equal to that which is now in the client’s account.
  6. Beneficiary designations — Many do not know that their will or trust does not decide where accounts like IRAs and annuities go when they die. The beneficiary designation does. Work with your clients to review these designations; they may not be up-to-date

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For more information about The Retirement Guys visit Securities and Investment Advisory Services are offered through NEXT Financial Group Inc., Member FINRA / SIPC. NEXT Financial Group, Inc nor its representatives provide tax advice or legal advice. The Retirement Guys are not an affiliate of NEXT Financial Group.