Another holiday changed in ways no one would want, because of the virus. Another holiday without some loved ones near…and for those near these holiday photos with lots of masks will be easy to identify as from this year…”oh, that must be from 2021…”
But in a way the sadness of not seeing loved ones brings home and into clear focus all we have to be grateful for, and the yearning to see those not here will make the next visitation all that much more sweet.
The burdens of the virus have fallen very unevenly and some of us to this point are relatively unscathed. For those so fortunate, our (as a friend of mine calls it) “great inconvenience”, is a trifling thing compared to those gravely impacted.
Turning to happier matters, we awoke today to a dusting of snow, which has come just in time and creates a Currier and Ives landscape for our holiday. Our furry four footed reindeer (our standard poodle) associate is beside himself in prancing through the snow.
As to legal thoughts at this time of year, we offer the following.
Please make sure you have taken all required minimum distributions from any IRA or other retirement account from which required minimum distributions must be taken, by the deadline for withdrawals. For most of us that date is the end of the year. The penalty for not taking such distributions is SEVERE. I doubt any of you are not on top of this issue, but I mention it as the saying goes, out of an abundance of caution. I say the end of the year because that is the date known to me, but please double check this with your financial advisor in case for any reason some other date applies to your situation.
And this is a good time to review your beneficiary designation (pay on death) forms filed as to any account or insurance policy.
If you have not reviewed your estate plan with your legal advisor since the SECURE ACT was adopted at the beginning of 2020, please do that, because the language of your estate plan may have different outcomes under the SECURE ACT as to distribution of retirement account assets that are governed by your trust, than under the law in effect when your documents were put in place.
If you have any income that has accrued in any trust, please be aware that any income retained in a trust (and not distributed out to beneficiaries) is generally exposed to very high income tax rates, at very low levels of income. This is one reason why so many trustees look to distribute income out to beneficiaries who may be in a lower tax bracket.
As to those acting as agents under powers of attorney, please remember that you can be called to “account” for how you manage and spend the assets of the principal, and that you can be called to personally pay back to the principal or their estate after their death, out of your own funds, any amounts that you cannot prove you used properly. So, keep good records. Keep receipts. Consider periodically having the probate court approve your doings through an accounting. If your principal is competent and there is really no reason to doubt that, get him or her to approve your account every year. If there is any doubt about the principal’s ability to make informed decisions about what you have done, or there is any reason others might at some point challenge your actions, consider taking other steps to protect yourself. Seek the advice of an attorney and do not assume that how you are doing things will stand up to scrutiny. Be especially careful if you are making any gifts.
We wish you a happy and merry holiday season. Please remember the information provided to you herein is not to be relied upon as legal or tax / accounting advice, and is intended for general informational purposes.
From all of us at Andrews & Young, PC