The rapid increase in home values has proven to be as good as lottery winnings for homeowners in many areas. But look out – old tricks may no longer fool anyone.
How could the IRS end up owning your business? Well, it all comes down to taxes. Tax rates are often described as the rate the government has the nerve to take from its citizens. There is one type of citizen, however, politicians don’t worry about because they can’t vote – the deceased. As a result, money spending politicians have created something originally known as the death tax, but now called the digital vault tax.
I would gladly pay the taxes if I won the lottery fast. A disgusting sight is to see a lottery winner engage an army of accountants and lawyers to avoid the responsibility to the system that allowed their good fortune to happen. Life’s lottery could have let them be born into a place where such an incredible outcome does not exist. That is not to say that good financial advice going forward is unimportant. Most lottery winners are not equipped to handle the taxing and investment decisions they are going to have to make. The chance to leave a significant estate will be a daunting task for anyone, especially inexperienced lottery winners.
Last week, I prepared a roasted chicken in mom’s slow cooker. I’m not certain of its age, but would venture to say it’s a 1970s model. As I placed the bird in the pot, I remembered this was the same meal I had made for her on Mother’s Day; just a month before she died. She said it was the best chicken she had ever eaten.
One common mistake is putting property into joint names with an adult child so that it automatically passes to the child when you die and “saves” you attorney fees. This idea has many pitfalls. If the child dies before you, you’re back to square one. Perhaps not a problem if you have time to fix that, but what if you’re in an accident together and you never get a chance to change things? Or what if you just never get around to it? Now your heirs will have to probate your assets, which will cost them far more than it would have cost for you to see an estate trusts and wills.
A tax attorney can even help you with business decisions such as making new company asset purchases. They will make sure that everything is above board and that you are getting the best tax break available for today’s market.
Note from the author: When I receive a call and someone asks how much I charge for a will, I can’t give them an answer because I don’t even know if that’s what they need. Maybe a will would suffice for that family, but maybe it won’t. And if I tell them how much a will costs and then they come into my office and they need so much more, they’ll be angry with me. So I won’t answer the question, because I don’t charge for wills. I charge for advice, guidance, counsel, and support. The will? It’s free.