Why Estate Planning Is the Best Use of Your Tax Refund

Author

Entrusted Legacy Law

For more information about the author, click to view their website: www.entrustedlegacy.law

Posted on

Sep 12, 2024

Book/Edition

Pennsylvania - Greater Pittsburgh Area

When that extra bit of money from your tax refund lands in your bank account, (kinda feels like Christmas, doesn’t it?)  it's easy to start dreaming about all the ways you can use it. Financial experts may tell you that it's a chance to pay off debts, tuck away savings for an emergency, or add to your retirement savings. You, on the other hand, may want to splurge on something special. However, there's an often-overlooked option that not only provides immediate satisfaction but ensures long-term benefits for both you and your loved ones: estate planning.

Estate planning might sound like a complex and daunting chore reserved for the wealthy, but it's actually a straightforward and crucial process for everyone. In its most basic terms, estate planning involves making a plan for what happens to your belongings and finances after you're gone, or if you become incapacitated. Think of it as creating a roadmap for your loved ones to follow, ensuring they're taken care of and know exactly how to handle your estate according to your wishes. After all, someone will have to do something with your stuff after you’re gone, and if you’re the one who takes care of it while you can, you can save your loved ones a lot of pain. And, make sure you are cared for in the way you want, by the people you want, if you become incapacitated.

And by the way, proper estate planning covers much more than just money and personal belongings, but we’ll delve into that in just a bit.

Why You Need an Estate Plan

Not only do you need a plan for what happens with your finances and personal items after you’re gone or become incapacitated, but you also need an estate plan if any of the following are true:

You care about the people in your life who will handle things for you, if you cannot. First and foremost, estate planning isn’t something you just do for yourself, it’s truly an investment you make for the people you love. If it feels daunting to you, imagine how they will feel left with a big confusing mess when something happens to you. And, it’s one of those things that you must get handled before you need it because by the time you need it, it’s too late, and you’ve just left the people you love the most with a big mess.

That’s why we say that estate planning is about protecting your family. It's about protecting their time, energy and attention, and leaving them with a gift of love. It’s a way of saying "I love you" that goes beyond words, providing them with security and guidance during a difficult time. By making your wishes clear, you can keep them out of court, prevent potential conflicts and ensure your loved ones are supported exactly as you intend.

You want your wishes to be honored. With an estate plan, you have the power to dictate exactly how you want to be cared for if you are incapacitated, or who makes decisions for you if you cannot. If you would not want to linger in a hospital bed for years like Terry Schiavo did before her death, you must create a plan. Otherwise, the people you love could get stuck in a court process fighting over your care. 

You also get to say who inherits your assets, from your home and savings to sentimental items. Planning ensures there isn’t any confusion and guarantees that your possessions end up in the right hands. Planning also makes it clear who should handle things after you are gone, and it makes it as easy as possible for the people you choose. 

You want to save money and time (for yourself and your family). Dealing with the court if you become incapacitated or when you die is time-consuming, can be expensive and is totally public. Without a clear plan in place, you or your family may face costly legal battles and time-consuming administrative hurdles. Your careful planning now can save them from this stress and financial strain, making the process as smooth as possible. In addition, careful planning ensures that you save yourself money by avoiding unnecessary costs if you are unable to care for yourself. 

You have minor children. If you have minor children, consider who is home with them when you aren’t. Would that person know what to do if you didn’t make it home? Or would the authorities show up at your house and have to take your children into the care of protective custody/strangers while they figured it out? If the idea of this terrifies you like it does most parents, you need an estate plan. 

Most parents of minor kids are overwhelmed with the demands of everyday life and don’t stop to think that estate planning applies to them. A common misconception is that planning is only for older folks who know their mortality is staring them in the face, and young parents think that’s too far off to warrant any consideration. That’s a mistake. Death happens to everyone and incapacity can happen before it, no matter how old you are right now. Don’t leave your kids at risk.

So now you know you need an estate plan but aren’t sure what to do next. If you feel like the process seems daunting, don’t worry. Taking that first step is easier than you might think. 

Put Your Tax Refund To Work 

You might consider using your tax refund to do your estate plan on your own or opt for a cheap online service. While these options can seem cost-effective at first glance, they don’t offer the comprehensive coverage and personalized advice that your unique situation requires. 

Instead, investing your refund in working with a heart centered, holistic attorney with a process in place for ensuring that your plan works throughout your lifetime is a much wiser choice. We will get to know you, your family dynamics, and your assets, and then help you choose the right plan for you both now, and into the future. Creating a will or a trust isn’t a one and done thing you do, and then put it on a shelf or in a drawer and never look at it again. When you do that, your plan is almost guaranteed to fail when the people you love need it. In that case, it’s almost better to do nothing because then at least you have it on your to-do list. False security is one of the greatest risks of estate planning.

We will help you navigate the law, and also help you tailor your estate plan to fit your specific needs, as well as provide peace of mind knowing that your estate plan is thorough and legally sound. Remember, when it comes to safeguarding your family's future and ensuring your wishes are accurately reflected, the value of expert guidance is well worth the investment.

At the very least, your attorney should help you create the relevant documents, including:

Creating a Will: A will is a document in which you detail the distribution of your assets and designate guardians for any minor children. It serves as your voice, ensuring your assets are allocated as you desire. 

Setting Up a Trust: For greater control over the distribution of your assets, a trust is invaluable. It not only allows for precise management of how and when your assets are distributed but can also offer tax advantages and circumvent the lengthy and public probate process. In addition, and maybe more importantly, a trust will help your loved ones avoid a lengthy, expensive,  and totally public court process, which can cost your family significant amounts of time, energy and attention. 

Selecting Guardians and Executors: A key component of estate planning is choosing individuals who will execute your wishes and look after your children if you are unable to do so. These crucial choices help safeguard your family's future. And if you want to go beyond merely choosing people to raise your kids, you need a thorough Kids Protection Plan, which takes into account anything that could happen (i.e., you’re in a car accident and they’re with a babysitter at home). A Kids Protection Plan also ensures your kids are raised by the people you want in the way you want, that someone you’d never want to raise your kids is able to, and that the right people are able to get emergency care for them if you’re traveling without them.

Managing Taxes and Expenses: Effective estate planning can significantly lessen the tax load on your beneficiaries, allowing a larger portion of your assets to benefit them directly instead of going towards tax settlements.

These are all undoubtedly important, and what most estate planning attorneys will do for you. However, a Estate Planning Lawyer will go a few steps further, ensuring that investing your tax refund in an estate plan is the very best investment you’ll make all year. In fact, every Estate Planning Lawyer promises to deliver a plan to clients that works throughout your lifetime. They do this by:

  • Empowering you to choose the right plan that fits your unique family situation, values, and budget (most lawyers will tell you what you need);
  • Ensuring your assets are inventoried and don’t end up lost (most lawyers won’t tell you that this happens - a lot - to the tune of billions of dollars every year);
  • Creating a Kids Protection Plan, a comprehensive plan outside of your will for what happens to your kids if something happened to you (most lawyers don’t even think to do this);
  • Being a trusted advisor for your family, so they have someone to turn to for help when something happens to you (most lawyers don’t ever make contact with your family after you’ve completed your estate plan); 
  • Capturing your memories, stories, values and family traditions so they are passed down to the next generations (most lawyers don’t think to do this either); and
  • A system for updating your plan at least every three years to make sure your plan stays up to date so as your life changes and the law changes, your plan works when you need it to (most lawyers treat their clients as a “one and done” transaction, never checking in again and letting your plan go stale).

What If I Didn’t Get a Refund This Year?

Now you may be thinking, bummer, I didn’t get a refund this year. Know these two things: 1) Estate planning is always a wise investment whether you get a refund or not; and 2) A Estate Planning Lawyer, using a unique process called Life & Legacy Planning, can help you organize your finances so you are more likely to get a refund next year, or at least not have a big unexpected tax bill, if that’s what happened this year.. A Estate Planning Lawyer will also help you get more financially organized than you’ve ever been before, so that you make the very best decisions about the allocation of your resources for yourself and the people you love. 

Estate Planning: The Ultimate Expression of Love

Among all the ways to use your tax refund, estate planning with a Estate Planning Lawyer ensures that your love and care for your family endure long after you're gone. It's an act of foresight that not only secures your family's financial future but also leaves a legacy.

Contact Entrusted Legacy Law at 412-347-1731 or click here to schedule a complimentary 15-Minute call.

 This article is a service of Entrusted Legacy Law. We don’t just draft documents; we ensure you make informed and empowered decisions about life and death, for yourself and the people you love. That's why we offer a Life and Legacy Planning Session, during which you will get more financially organized than you’ve ever been before, and make all the best choices for the people you love. You can begin by calling our office today to schedule a Life and Legacy Planning Session and mention this article to find out how to get this $750 session at no charge. Please note this is educational content only and is not intended to act as legal advice.

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Local Services By This Author

Entrusted Legacy Law

Elder Law 100 Pinewood Lane Suite #303, Warrendale, Pennsylvania, 15086

Our Firm Prepares You for Life What makes our firm different is that we were built with the needs of growing families in mind. We understand you are BUSY, you are growing, you are planning for a life of prosperity and you value ease, convenience and efficiency. You are raising children, and caring for elderly parents, while also working hard to build your own nest egg for a lifetime of support. You want to know youve made the best decisions for your family and that your plan will work when your loved ones need it most. You want to make sure your minor children would be raised by the people you choose, and never by anyone you wouldnt want, and that your teens and adult children are properly prepared to care for you and what you leave behind.  You want to feel confident that youve made the right choices, and handled everything so that you arent leaving behind a mess, when something happens. That is our focus as well. Weve developed unique systems to give you the same access to a Personal Family Lawyer as was previously only available to the super-wealthy, so you can have the guidance you need to build and maintain a life of prosperity and wealth. And, to keep your family out of court and out of conflict, which is the greatest risk to the people you love and all you have created, even if youve already worked with a traditional lawyer or created documents online. Our Team Is Here for You We encourage communication with our clients. In fact, weve thrown out the time clocks so you never have to be afraid to call with a quick question. Everything we do is billed on a flat-fee basis, agreed to in advance, so there are never any surprises. We have a whole team to serve you. When you call our office to ask your quick question, you wont have to wait hours or days for a phone call back. Youll get your question answered, right away. And, if you need to schedule a more in-depth legal or strategic call with your Personal Family Lawyer, a call will be scheduled when you're both available and ready for the call so we can make the very best use of your time and not waste your time by leaving voicemail after voicemail back and forth. And, we ensure the most important details of your planning are followed through on and your plan continues to work throughout your lifetime. We have a funding coordinator to ensure your assets are owned the right way throughout your lifetime and none of your assets will end up going through a long, expensive court process or being lost to the state because they were missed after your death. Weve created unique membership programs to keep your plan up to date year in and year out as well as give you access to our Trusted Team of Legal Experts for guidance on ANY legal or financial matter. One day you will need a lawyer. I dont know why and I dont know when, but when you do, you will be grateful you can call on us and well be here to advise you or get you out of a jam. We Help You Transfer Your Life and Legacy Lastly, we believe your financial wealth is only a small part of your overall Life and Legacy Planning which is made up of your far more valuable and most often lost upon incapacity or death intellectual, spiritual and human assets. These assets are what make you who you are, and sum up whats most important to you. And, a survey of inheritors has revealed that what they care about even more than inheriting your money, is inheriting these intangible assets.   Most estate plans only focus on the transfer of your financial wealth to the next generation. Most people have such great intentions of passing on the intangible, but very few ever get around to it. Its just not a priority, until its too late. How much do you know about your grandparents values? Their most prized personal possessions? How they felt about you? What they had learned during their lifetime? If you are like most people, you know very little. Thats why we build the capture and passage of these most valuable assets into every estate plan we create. Not only will we help you pass on your money, but also your values, your insights, your stories and your experience the truly valuable assets your loved ones care about the most.  Weve developed a tool that allows us to capture and pass on your whole family wealth, including your Intellectual, Spiritual and Human assets.  I cant go into all of the details here, but well definitely talk about it when you come in for your Life and Legacy Planning Session.