Without fail, my busiest months are January and December. In January, clients want to get started on their New Year’s resolution to get their legal documents prepared and signed. In December, clients who resolved to “get prepared” in the New Year can’t believe that year has gone by, and are determined not to let another year go by without fulfilling their promise!
In addition to getting your estate planning documents in order or up to date (your will, health care proxy, and power of attorney, among others), this month’s column is dedicated to some other manageable resolutions to make for 2013.
January: Max out your flexible spending accounts. Recover the funds you spent in 2013. You can submit for reimbursement for expenses up until March 31 for expenses incurred prior to Dec. 31, 2013. Take a moment to schedule your annual appointments with your primary care physician, pediatricians, dentist, eye doctor, and others.
February: April 15 will be here before you know it. Make an appointment with your accountant and start gathering all the documents you’ll need. If you have money management software, start running reports and cleaning up your data. The sooner you file, the sooner you’ll get a refund.
March: Go looking for hidden treasure. Find some money you didn’t know you had, just in case you owe taxes! Banks, insurance companies, utilities, and other businesses are required by law to surrender inactive accounts which are “lost,” “abandoned,” or “unclaimed” to the state. The state comptroller serves as custodian of the money, and if you can prove you’re entitled to it, it’s yours. Search your name to see if the state is holding your money and to complete the necessary forms at www.osc.state.ny.us/ouf/index.htm
April: Insure your peace of mind. Review your life, disability, homeowners, and auto policies to make sure they’re sufficient for your needs and that your beneficiaries are correctly named and up to date.
May: Are your passports up to date? Do you have passports for your children? You need passports for your infant children if you are planning to travel overseas in the summer months. In addition to other requirements, the process for children requires the children to be present with both parents (or for one parent to have a properly signed authorization and a copy of the other parent’s driver’s license). Check travel.state.gov/passport/get/get_4855.html for more.
June: Medical authorizations. Make sure all your children’s camps, child care facilities, and care givers have a medical authorization in the event that you or your spouse or partner cannot be reached. Parents should also have a “stand-by guardian” form for instances where they are unable to communicate due to emergencies. Adults should also have their health care proxies up to date.
July and August: Relax at the beach knowing you’ve crossed so many important items off your list.
September: Back to school! Purge the clutter. It’s a good idea to keep tax returns and back-up documentation for five years. Insurance policies should be kept indefinitely. Utility bills should be tossed within one month. All the rest can go.
October: Tax loss and profit selling. Don’t wait until Dec. 31 to sell under-performing investments as tax-losses to offset capital gains, such as those that accrue from mutual fund dividends at year-end. You can purchase the same or a similar asset 31 days after the sale, keeping in mind that purchasing at a lower price will re-set your cost basis. At the time of writing this month’ column, no decision had yet been made as to the “fiscal cliff” and the fate of the capital gains and dividend tax. Nonetheless, the last quarter of any year is a good time to consider selling profitable stocks that can be set-off against losses and re-purchased in 31 days.
November: Make annual gifts. The federal government allows tax-free gifts of $13,000 ($26,000 if you are married and “split gifts”) to each individual per year (including your own children!) This is a good opportunity to start shifting some of your own assets to your children — preferably by setting up a minor’s trust that dictates how and when the money gets spent and distributed to the children. Don’t forget grandparents who may be inclined to take advantage of this exemption as well, but also may want to protect the gift from creditors and spendthrift children by placing it in a trust.
December: Spend wisely. While in the mode of holiday shopping, consider some tax-smart purchases, such as charitable contributions, paying tax-deductible expenses such as real estate taxes, quarterly state or local income taxes, investment-related expenses, and dues before year end. December is also a great time to evaluate how close your spending went compared to plans for the year, and set a new budget for the year ahead.
Alison Arden Besunder is the founding attorney of the law firm of Arden Besunder P.C., where she assists new and not-so-new parents with their estate planning needs. Her firm assists clients in Manhattan, Brooklyn, Queens, Nassau, and Suffolk Counties. You can find Besunder on Twitter @estatetrustplan and on her website at www.besunderlaw.com.
