Wealth Management and Tax-Related Services: The Inevitable Link

The link between wealth management and tax-related services is strong and growing stronger every year. For those who are either building an estate plan, making decisions about yearly gifts, establishing trusts, or partaking in special needs planning, it can be crucial to think about how yearly taxes will change based on the structure of your assets. With April 15 having recently come and gone, it is natural to feel like you may have been rushed into filing your taxes or that you did not have the chance to include everything you intended to include.

On today’s blog, we cover some important connections between the two industries, as well as what you can do if you feel like you need more time on your taxes. As always, this blog represents only a portion of what clients should know about the overlap between wealth management and tax-related services, and it is never a bad idea to speak with an experienced attorney that can help you navigate both worlds as seamlessly as possible.

Filing for an Extension

If you are in the process of starting to prepare your estate plan, do not hesitate to request a tax extension. During tax season, there is a common misconception that requesting an extension leads to an increased audit risk, but this is not the case. Instead, extensions can offer much-needed relief to those who are taking time to get their affairs in order. For those who will end up filing differently depending on the structure of their estate plan, it can be well worth it to ask the IRS for more time to file. Additionally, creating and finalizing an estate plan can take many months, and it is better to participate in the process thoroughly and carefully, so as not to skip any key steps in drafting your plan.

To request an extension, you will likely need to file for an extension with the IRS as soon as possible. By filing this request by April 15, you can avoid penalties that you might otherwise incur by filing your taxes past the deadline. One other option, if you have already filed your taxes, is filing an amended return, which can allow you to include information you did not have at your disposal when you originally filed.

Looking Ahead to Next Year

Additionally, you might be looking to start or change your estate plan in the coming months. If this applies to you, it is crucial that you ask your estate planning attorney about how your estate plan will affect your taxes for 2024 (to be filed in 2025). One of the most common mistakes we see in our area of law is that individuals procrastinate on gathering important documents, finalizing plans, and submitting paperwork; by getting ahead of the process now, soon after the 2023 season comes to a close, you can avoid this potentially costly error.

Considering Tax Implications for Wealth Management

It is just as important to make sure you understand how taxes could negatively affect your wealth management goals. For example, you might be taking up various trading activities as part of your attempt to grow your assets, and while initially beneficial, these activities could end up in generating a high tax bill when April comes around. Too often, we see clients who wait to think about taxes after they forge a plan for wealth accumulation and put that plan into place. Ultimately, tax implications are just one part of a wealth management strategy, and other considerations (family circumstances, short-term needs, and possible beneficiaries) are all other factors to keep in mind.

Similarly, you can think about how your charitable goals might align with a possible tax benefit. If you have money to spare, not only can it be worthwhile personally to find a cause you care about, but it can also reap rewards when you do file your taxes in April. Notably, only charitable donations over a certain amount qualify individuals for a tax benefit, so you should speak with an expert to get a handle on what this amount might be for you.

Consulting a Boulder Estate Planning Attorney

As you speak with professionals regarding either your taxes or your estate plan, we advise that you make sure the firm offering you their services is prepared to speak on both matters. Recently, we have seen an uptick in major transactions that relate to both industries, and even if your tax consultant does not have expertise on estate planning (or vice versa), he or she should be able to refer you to someone who does. While it can be daunting to have to consider both taxes and wealth accumulation at the same time, choosing qualified, experienced professionals to guide you can help you stay on track.
Ultimately, estate planning and tax filing are both inherently individualized processes, and it is important to speak to a Boulder estate planning attorney to make sure you are working toward your goals and doing everything above board. By taking the time to get expert advice in the short term, you can end up saving yourself major headaches in the long term.

The Braverman Law Group: Boulder Estate Planning Attorneys Working for You

At the Braverman Law Group, we are committed to providing the personalized and client-centered representation to those that retain our services. We pride ourselves in offering clear explanations of complex issues as well as powerful execution of litigation strategies, so that we can fight diligently for our clients’ best interests. Our team handles a range of cases, including those related to estate planning, trust administration, special needs planning, and Medicaid planning. We are honored to be part of your estate planning journey every step of the way, and we are committed to making sure you have the right tools to achieve your financial goals.
For your free and confidential consultation with an experienced Boulder estate planning lawyer, give our office a call today at (303) 800-1588. If you’d rather, you can also fill out our online form and have an attorney reach back out to you as soon as possible.

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