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.

  • Oct 2

    A tax return is nothing more than a report about what happened last year. After the year is over, there’s generally not much you can do to change what happened. Tax planning though, is looking forward. What can we do differently from this point forward to save on taxes?

    Like Benjamin Franklin said: “An ounce of prevention is worth a pound of cure.” — it’s always better to be prepared BEFORE you hit the deadline. In the tax world, this relates to tax planning (which reminds me: have you come in to see us yet, before the end of the year, so you can do that? Call 251-633-4070 to set up an appointment, if not).

    But in larger cases, the best kind of preparation takes more than just taxes into account.

    Many well meaning people think that estate plans are for someone else, not them. (Our tax clients hopefully know different.) They may rationalize that they are too young, or don’t have enough money to reap the tax benefits of a plan. But as the following list makes clear, estate planning is for everyone, regardless of age or net worth.

    Here are my NINE reasons why you should consider this right now…

     

    1. Loss of capacity. What if you become incompetent and unable to manage your own affairs? Without a plan, the courts will select the person to manage your affairs. With a plan, you pick that person (through a power of attorney).
    2. Minor children. Who will raise your children if you die? Without a plan, a court will make that decision. With a plan, you are able to nominate the guardian of your choice.
    3. Dying without a will. Who will inherit your assets? Without a plan, your assets pass to your heirs according to your state’s laws of intestacy (dying without a will). Your family members (and perhaps not the ones you would choose) will receive your assets without the benefit of your direction, or of trust protection. With a plan, you decide who gets your assets, and when and how they receive them.
    4. Blended families. What if your family is the result of multiple marriages? Without a plan, children from different marriages may not be treated as you would wish. With a plan, you determine what goes to your current spouse, and to the children from a prior marriage or marriages.
    5. Children with special needs. Without a plan, a child with special needs risks being disqualified from receiving Medicaid or SSI benefits, and may have to use his or her inheritance to pay for care. With a plan, you can set up a Supplemental Needs Trust that will allow the child to remain eligible for government benefits while using the trust assets to pay for non-covered expenses.
    6. Keeping assets in the family. Would you prefer that your assets stay in your own family? Without a plan, your child’s spouse may wind up with your money if your child passes away prematurely. If your child divorces his or her current spouse, half of your assets could go to the spouse. With a plan, you can set up a trust that ensures that your assets will stay in your family and, for example, pass to your grandchildren.
    7. Financial security. Will your spouse and children be able to survive financially? Without a plan and the income replacement provided by life insurance, your family may be unable to maintain its current living standard. With a plan, life insurance can mean that your family will enjoy financial security.
    8. Retirement accounts. Do you have an IRA or similar retirement account? Without a plan, your designated beneficiary for the retirement account funds may not reflect your current wishes, and may result in burdensome tax consequences for your heirs (although the rules regarding the designation of a beneficiary have been eased considerably). With a plan, you can choose the optimal beneficiary.
    9. Avoiding probate. Without a plan, your estate may be subject to delays and excess fees (depending on the state), and your assets will be a matter of public record. With a plan, you can structure things so that probate can be avoided entirely.
  • Jul 12

    “Life is short, break the rules. Forgive quickly, kiss slowly. Love truly.”– Mark Twain

    Wow! Did you see Nik Wallenda walk across the Grand Canyon? June 2012, it was Niagara Falls, this year, it’s the Grand Canyon. Pretty incredible!

    I can tell you with a fair degree of certainty that this man has done something beforehand: estate planning!

    Estate planning involves much more than avoiding the estate tax.

    Despite the recent changes to estate tax law, there are some common myths still held by the majority of Americans. In fact, it’s still estimated that 60% of Americans don’t even have a basic will. Now that’s a big problem!

    It’s a big problem because Myth #1 is everything goes to your spouse, should you leave this world.

    Myth #2: After I create my will or living trust, there’s nothing left to think about. A trust doesn’t help a thing if it doesn’t have any assets. And they don’t just magically move there. The assets have to be re-titled.

    On top of that, you need to periodically revisit your will or trust to make sure it is updated and reflects major life events such as a divorce or birth of a child.

    Myth #3: If I have a will, my estate automatically avoids probate. Not so, my understanding is that all wills are subject to probate. Not that probate in Alabama is all that costly or time consuming. But, if it’s probate you want to avoid, it’s a living trust you need to be looking at. With a living trust, the property in the trust transfers to your beneficiaries outside of probate.

    Not everyone needs all the documents available, but it’s something you can’t paint over with a broad brush. It’s important to talk with an expert on these matters.