By Brian E. Ravencraft, CPA, CGMA, Partner at Holbrook & Manter, CPAs
Most of us have heard the quote from Benjamin Franklin, “In this world, nothing is certain except death and taxes.”
It would be safe to say that no one enjoys paying taxes and not many really want to think about death either. But both require planning and thought.
Thank back to the beginning of the year. Maybe you made some resolutions and then promptly forget them. The end of January rolled around and you received mail marked “Important Tax Document Enclosed” and realized that you needed to get some documents together for your taxes to be prepared — that’s worse than going to the dentist! And, while we should see our dentist regularly, we should also be proactive with our tax planning. It is always a good idea to follow up with your tax preparer if your tax situation changes; you have a move, a new baby, a different, job, an inheritance, or other life altering event.
If none of the above situations apply to you, it is still a good idea to be organized and ready for the tax preparation. Don’t wait until early April each year to get your tax information together. Keep a file folder ready for any tax documents that arrive. It is a good idea to make up a folder at the beginning of a new year and put any tax related documents in that folder as you receive them. Did you make a donation to Goodwill? Put your receipt and the amount donated in the folder. Did you sell or buy a new home? Make copies of the settlement statements and put them in the folder. Simple things like that can make getting ready for the accountant so much simpler.
Preparing for taxes is not usually greeted with warm, fuzzy feelings and neither is preparing for death. Hopefully, it will not happen for a very long time, but all of us still need to prepare for it — young or old, married or single. We do not want our families and loved ones to be overly burdened with our passing. It is difficult to deal with the loss and the gaping hole that is left, but to be completely unprepared compounds the grief and the loss for those left behind. Below are some suggestions to get started in the process of getting prepared.
- Write a last will and testament — it does not have to be fancy or minutely detailed, but at least get a basic will in place. There are templates that can be found online that can be used to prepare a legal will. It is a good idea to check on the legal requirements for a will in Ohio.
- Designate a power of attorney – choose someone you trust to be a power of attorney just in case you are unable to sign important documents. The POA does not have to be a family member or close friend. Sometimes a trusted advisor is a great option (notice the emphasis on trust)!
- Prepare a living will and designate a medical power of attorney — again, choose someone you trust to make decisions you would want to have made when you no longer can make them. Discuss with the MPOA your wishes and the decisions you would want to have made, too.
- Keep a master file of where important papers are located — insurance policies, mortgages, wills, trusts, Healthcare power of attorney, etc. Include in that list your bank accounts and safe deposit box if you have one, your broker and broker accounts, your CPA, your attorney, your financial planner, etc. Let your POA or relatives know where this file is located.
- Outline your funeral or memorial service — if there are certain things you want, make them known.
- Keep a list of your online presence — keep logins and passwords saved where a trusted family member or friend can find them.
All of these items can be updated as needed. As your family grows, your last will and testament will most likely change. You may consider setting up a trust to see to the needs or your family. There are so many options. If you have questions on how to get started and what to do, contact our office. We would be happy to assist you.
Brian E. Ravencraft, CPA, CGMA is a Principal with Holbrook & Manter, CPAs. Brian has been with Holbrook & Manter since 1995, primarily focusing on the areas of Tax Consulting and Management Advisory Services within several firm service areas, focusing on agri-business and closely held businesses and their owners. Holbrook & Manter is a professional services firm founded in 1919 and we are unique in that we offer the resources of a large firm without compromising the focused and responsive personal attention that each client deserves. You can reach Brian through www.HolbrookManter.com