According to Benjamin Franklin, the only things certain in life are Death and Taxes.
I just spent most of my Saturday reaching out to people who I thought needed to know that a good friend of ours had passed away. This lady had more influence than any single one of us realized. Let’s call her Jill.
Why am I sharing this with you? Why am I playing with the many pieces to the puzzle of her life? Well, because Jill left no will and I am trying to make some sense of what is left. How does that involve me? I helped her buy her apartment and the neighbors and manager reached out to me as someone who might be the one to start trying to tie up loose ends.
I want YOU to understand the importance of drafting your will or even creating a revocable living trust. I have helped many people work with the legal community in preparing these critical documents. Because we had had conversations in the past, we think we know what Jill’s wishes were. But did she change her mind since we talked long ago?
Where did she keep her important documents? Will I find them all in one place? Do I have a responsibility as co-owner of her apartment? Am I biting off more than I want to chew by letting people know of her death? Have I forgotten anyone? I have no map to follow. But I do have a law firm I can call for advice.
Will I have a liability that I am not aware of? I learned at the Internal Revenue Service, that ignorance is no excuse. Just because I don’t know the answer doesn’t mean I can risk blundering into committing some grave mistake.
Jill is not just a friend. She is also a former tax client. Jill filed her last tax return many years ago. She has not had sufficient income to require her to file since that last return. But will that be the case for you? Some clients DO have income that keeps them filing a tax return up until the date of their death.
Other clients have created a revocable living trust. As long as they are living, they can change their mind. They can revoke one or more provisions of that trust. While they are alive, they report all that income on their personal return.
The day after the trust owner’s death, the trust becomes IRREVOCABLE. No more changes can be made and the trust then must file it’s own tax return. Have you ever heard of Elvis Presley or Michael Jackson? They both are making more money after their death than anyone ever imagined. As long as there is income, there is tax to pay.
After you die, your spirit will not really care what happens to the stuff you leave behind. But the people you leave behind may feel this stuff is important. Help them know what you would want them to do.
- Step One: Make out your will or trust, or have someone assist you. This is your last love letter to family and friends.
- Step Two: Tell someone where you have put your important papers.
-
Step Three: Enjoy your life. This is NOT a dress rehearsal.