Richard A. Lindsey, CPA

Lindsey & Waldo, LLC – Certified Public Accountants

  • Aug 18

    It took more than a year following his death for a judge to confirm that Prince’s six siblings were his rightful heirs. Reportedly, more than 45 people came forward claiming to be his wife, children, siblings, or other relatives.

    Last year, the legendary artist passed away at age 57 leaving behind not only a treasure trove of music and dance, but a $250 million fortune, as well. What he didn’t leave behind was a will or estate plan.

    You may not have people clamoring after your money, but it’s still important to consider hiring an expert to sort through the complicated process of estate planning. We’ve all seen the ads for DIY legal documents, including wills and trusts. And the law does not require you to hire an attorney to prepare your will. But, even the highest ranking jurist of his time, Supreme Court Chief Justice Warren E. Burger, should have relied on estate planning experts to prepare his estate plan. Apparently, Chief Justice Burger typed his own will. The will only contained 176 words but several typographical errors and, more importantly, the will failed to address several issues that a well-drafted one would typically cover. His family paid over $450,000 in taxes and had to seek the probate court’s permission to complete administration tasks like selling real estate.

    To be better prepared than Prince or Chief Justice Burger, seek out the assistance of an attorney and a CPA. Together they can guide you through the unknown of estate planning and will preparation so that your heirs receive what you expect.

  • Aug 17

    18 years ago, you cradled him in your arms– the most beautiful baby ever born. You’ve nurtured him, instructed him, helped him grow, and now it’s time for him to test his wings… at the south’s biggest party school. (You do know that’s a real ranking, right?) Away from home. Away from your supervision. You don’t really want to think about “what if?” What if something happens while he’s away at college?

    Once college students reach the age of majority (18 in most states), they are considered adults, and you, as their parents, are not entitled to see their medical records, their grades, their finances, or other documents. You’d think, since you’re the one footing the bills, paying the tuition, the room and board, and just about everything else, your parental rights would continue. But they don’t. Once a student reaches that magic age, they have a right to legal privacy and the right to govern their own affairs. So, it’s important to discuss with your children ways you can act on their behalf — or help protect them —  should an emergency arise.

    Set up ICE (in case of emergency) contacts. Go ahead. Get Junior in here right now. Well, ok, next time you’re both home at the same time. Put ICE by the names of the people you’d want him to call in case of an emergency. Or maybe it’s not him calling; maybe it’s the police, fire department, or rescue workers trying to reach out to someone. According to WebMD, if Junior is in an accident and can’t call, a first responder can call an ICE contact on his cell phone to let a loved one know what has happened. You can have multiple ICE contacts… ICE, ICE2, ICE3, and so on.

    ICE contacts don’t give someone the legal authority to act on the student’s behalf, it merely starts the communication process.

    Prepare a health care durable power of attorney or healthcare proxy. Although accidents are the leading cause of death for young adults, it doesn’t take something that severe for parents to need to be involved. When Kathy was away at Ole Miss, some 315 miles away, she developed an intestinal bug which landed her in the infirmary. We rushed to get there only to find out the doctors refused to discuss her condition with us, citing privacy concerns.

    As much as you hope you’ve prepared them to take care of themselves, and as much as they think they are ready, you are still likely to be their fallback for emergencies. A health care durable power of attorney is a legal document that allows you to serve as his/her health care agent. Students should also sign a HIPAA (Health Insurance Portability and Accountability Act) release that gives medical practitioners permission to share information with you.

    Have a durable power of attorney. For most students, the benefit of a power of attorney is to enable their parents to assist them with credit card payments or deal with a landlord, but yes, it should give you access to their financial and scholastic records at college. In most cases it goes into effect when signed, but can be revoked at any time.

     

    How do you get Junior to sign if he’s still thinking you don’t have a clue? Try gentle persuasion first. If that doesn’t work you can consider making it a condition of paying tuition, or buying the car, or whatever.

  • Jun 26

    While the 2015 hurricane season is predicted to be below historical averages, it is still wise to be prepared when safeguarding our tax documents and records. You should complete the following before it’s too late.

    • Create an electronic back up of your records.
      • These records should include bank statements, tax returns, insurance policies, and so much more. You should store this electronic copy in a different place than the original documents.
    • Document/inventory your valuables.
      • The best way to document your valuables is by taking pictures or video of the items in your home.
    • Update your emergency plans.
      • These should be reviewed and updated once a year and related parties should be notified of any changes or updates.

    If for some reason you don’t have these safeguard procedures in place when the next disaster hits our area, the IRS can be of some help. Upon a taxpayer’s request, the IRS can provide you with the previously filed tax returns and filed forms such as W-2s, 1099s, etc.

  • May 30

    Too often natural disasters strike and serve as reminders that it’s important for both individuals and businesses to protect themselves against the potential financial consequences of such events. A few smart steps we recommend include making electronic backups of important records, including your insurance policies, tax returns, bank and credit card account information, and vital records. It is critical that you store this backup at a separate location that will be easy to access if your area suffers damage. You should also take the time to take pictures or videos of your home or business and store them separately, in case you need to make an insurance claim.

    If you run a business, you must consider how you will get up and running again after a disaster. It’s a good idea to develop contingency plans that will enable employees to work from home or elsewhere if your location is damaged or inaccessible. Both businesses and families should consider using phone trees, or other methods, to maintain contact in an emergency. Review your contact and contingency plans every year to be sure they are up to date.

  • Apr 19

    Astronomers reassured us we would be safe – this time—but this was “a wakeup call for the importance of defending Earth from future asteroid impacts.” A few weeks ago an asteroid, named 2012 DA14, passed within a hair’s width of the earth. (Astronomically speaking, anyway. 2012 DA14 passed within 17,100 miles of earth at a speed of 17,500 miles per hour.)

    They don’t always miss. Ironically, on the same day that 2012 DA14 streaked by, a meteorite exploded over Chelyabinsk, Russia with the fury of 30 atomic bombs. Amazingly, although 1,200 people were reported injured, no one died.

    But, what if 2012 DA14 hadn’t passed harmlessly by? What would our friends at the IRS have done if 2012 DA14 had struck the earth, with its energy estimated at 200 times the power of “Little Boy” that flattened Hiroshima, Japan?

    It shouldn’t surprise you that the IRS has well-established doomsday plans. Its manual outlines comprehensive continuity planning requirements for all sorts of emergencies, including “natural disasters, accidents, technological failures, workplace violence, and terrorism.” Their goal is to “ensure the continuation of the IRS mission essential functions under all circumstances.”

    So, just what would happen if Washington, or another major city, was taken out by a chunk of space rock? According to the plan, the IRS will resume assessing and collecting taxes within 30 days of the event.

    The manual even suggests taxpayers in the strike zone might get a “Get Out of Jail Free” card “on the premise that the collection of delinquent accounts would be most adversely affected, and in many cases would be impossible in a disaster area.” Of course, outside of the immediate strike zone, “in areas where the taxpaying potential is substantially unimpaired, enforced collection of delinquent taxes will be continued.” Surprise, surprise, surprise!

    If you have damages caused by a meteor strike, or other natural disaster, not reimbursed by insurance (I think there’s an exclusion for meteor strikes on my policy) there are some tax breaks you can take advantage of. Firstly, you’ll have to reduce the amount of your loss by $100. Side note: after Hurricane Katrina, the $100 reduction was waved, and presumably, it could be again. Then your remaining loss can be deducted to the extent it exceeds 10% of your adjusted gross income.

    None of us like paying taxes – certainly not more than we are absolutely required to – but you don’t have to wait for a chunk of space rock to take out your stuff to pay less taxes. The real answer, of course, is planning. If “continuity planning” is the answer for the IRS, then tax planning is the answer for us. Call us before another disaster strikes and see how much you can save.