The tax and estate planning process can seem like an overwhelming endeavor-but it needn’t be. If you are faced with helping a loved one with end-of-life planning or are thinking ahead for yourself, working with a tax advisor will ease the process. Here are four questions to ask a tax advisor:
1. How much do you charge?
While this may seem like an obvious question, many people either forget to ask (until all the work is done and they receive a bill) or they are reluctant to ask (thinking it seems like a “cheap” question). Don’t be afraid to ask about pricing-both an estimate and whether it is billed hourly or by retainer-up front!
2. What is your-and your firm’s-background?
It is advisable to seek out a firm and tax advisor that specializes in estate planning. While most tax advisors could help you in the planning process, a planner that has experience and qualifications in estate planning will be able to help you create the best tax and estate plan.
3. What options do you recommend and why?
Although tax law is tax law, when planning your taxes and estate, a “one-size-fits-all” approach simply doesn’t make sense. The tax advisor should be able to tell you the advantages and disadvantages of various estate planning options and he or she should be aware of compliance with and changes in tax law.
4. What information do I need and how should I keep it updated?
You already know how much paperwork is involved with federal and state income taxes. There is just as much paperwork in tax and estate planning. Ask your advisor which documents, forms and statements should be kept on hand, and if and how often those documents should be reviewed or updated.
You should feel comfortable asking your tax advisor questions about estate taxes and planning. In addition to asking a professional these critical questions, you should plan ahead for your estate documents and also be aware of the costs of end-of-life options.