With tax season well behind many residents in Texas, most people have long put out of their minds the financial information they needed to gather during tax preparation time. But while most people won’t think about their assets until next year, many estate planners suggest that now is the perfect time to start planning-and they’re not just talking about planning for tax season either.
Many estate planners are suggesting that people start considering how the new tax code will affect their financial plans for the future. Though a majority of people will not be affected by the largest tax law change, the increase of estate tax, subtle changes to the tax code could actually have a considerable impact on a majority of people down the road.
Looking over financial assets such as insurance policies and retirement funds now before they go back into a filing cabinet is a suggestion many planners are making to their clients. It might be advantageous to check contributions to retirement funds now versus closer to tax season. Because of the recession, people may have wanted to protect their money by taking smaller risks last year. With the market on the rebound, it may be time to change things around to maximize assets in the end.
During the hectic panic of the fiscal cliff, many wealthy people made decisions about their estates that they may regret next year. With the fear of rising estate taxes and reduction of exemptions for gift tax, many people rushed to turn portions of their estates into trusts. While still protected, forgetting about it could prove ominous if the tax code does not shift the way people were previously predicting.
Although the process might seem long and cumbersome to undertake at this time, failing to do so now could become regretful down the road. The question we pose to you then is why not take the time to protect your assets now while you still can?
Source: The New York Times, “Estate Planning Remains a Moving Target Under the New Tax Law,” Paul Sullivan, April 26, 2013