6 Factors for Estate and Financial Planning in 2020

6 Factors for Estate and Financial Planning in 2020

By Solid Serenity Legal Solutions

This year has brought a lot of changes for our families. Many people are facing challenges in adapting to a virtual world. Though those challenges may vary, the reality is, we are all facing a new normal.

In an attempt to help ease some of the stress and discomfort with the new normal, state and federal agencies have adopted new policies and laws. Those policies and laws impact your financial and estate planning.

Here are 6 factors for financial and estate planning in 2020.

(1) Tax Changes

The 2020 Federal tax filing deadline has been extended from April 15 to July 15. This extension also applies to most payments. The extension was automatic, so you do not need to file anything or do anything to receive the extension.

Many states have also extended their tax filing deadline to coincide with the Federal deadline. You will need to check your own state’s information to confirm an extension.

(2) Temporary Retirement Account Changes

The recently passed CARES Act suspends the need to take required minimum distributions for 2020. The Act also allows taxpayers to rollover any required minimum distributions already taken into a new IRA, not the original account from which they were taken.

Generally, early withdrawals from an IRA are subject to a penalty tax. Under the CARES Act, that penalty is waived for up to $100,000 if those withdrawals were made for reasons related to COVID-19. Keep in mind these early distributions will likely be subject to income taxes.

(3) 100 % Adjusted Gross Income Charitable Contribution Deductions

The CARES Act removed the 60% of adjusted gross income limit on deductions for contributions to charitable organizations. The change in limitation may benefit some people who convert their traditional IRAs to ROTH IRAs, or certain businesses. Speak with a tax advisor to see if this deduction can benefit you.

(4) Financial Assistance for Small Businesses

The CARES Act provided some financial assistance for small businesses. As many have heard, there has been some trouble with initial funding. However, a second round of funding is on the horizon.

Some small businesses may qualify for disaster loans with the SBA and others may qualify for the Paycheck Protection Program through their bank. Some of these programs are 100% forgivable loans if certain requirements are met. Talk to your local bank to find out what program works best for you.

(5) Wills, Trusts, Durable Powers of Attorney, and Other Estate and Incapacity Planning

COVID-19 has made the whole world face their mortality. We know that more than 50% of individuals do not have an estate plan. If you’re one of them, now is the time to put one in place.

If you do not have a Durable Power of Attorney or Advance Directive for Healthcare and you are temporarily unable to make decisions for yourself, and/or manage your bills and finances, your loved ones will face an uphill battle trying to take care of you. They will have to go to Court, pay a large amount of money, and risk their health just to have what they need to act for you. Save them money, time, and heartache. Get these documents in place now.

On the other hand, if you do not have a Will or Trust in place and you die, the state will decide for you who gets your assets. Did you know that if you have a spouse and children and you have any assets titled just in your name, your spouse does not automatically get those assets in probate?

Learn more about Estate Planning.

What about your kids? The default caregiver is always the other parent. But, if both of you are sick, or worse, die, where will your kids go? Without the proper documents, they will go to DHS custody. Protect your family. Make your plans today.

(6) Low Interest Rate Loans

Are you concerned that you may not be able to afford the right planning for your family at this time? The rates for the Fed have reached all time lows. Now is a great time to apply for an extremely low interest loan to begin your plan. these loans can also be beneficial for refinancing options to further your current estate plan for certain planning strategies.

Let us know how we can help you today.

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