Broker Check


Tax Reform - Clean Up on Aisle 3

| October 12, 2018

Have you ever wished you had a “Clean Up Button” in life? We all have messes and well…they’re messy. The problem with messes, beside the actual mess, is that they loom over you as long as they exist and cause undue stress.

Believe it or not, Tax Reform has created a “Clean Up Button” for a lot of people. Ask yourself if you can relate to having one of these messes:

  • You haven’t saved enough for retirement
  • You worry about running out of money in retirement
  • You pay too much in taxes
  • You feel like you have a target on your back and worry about being sued
  • You worry your kids won’t be as successful as you
  • You want pass your business on to your kids, but…
  • You want to sell your business, but…
  • Your financial life is successful, but disorganized
  • You worry about your kids not valuing the legacy you will leave behind
  • You worry about being fair to your kids
  • You worry about divorces
  • Your estate plan was done years ago
  • You worry about taxes for your family if you died
  • You would worry about your spouse if something happened to you
  • You are concerned about your investments
  • You have a mess of insurance policies
  • You worry about what would happen if you or your spouse need long-term healthcare

So there is good news and there is bad news: If you can relate to one or more of these, you probably have one of those “Clean Up Buttons” that can help or even fix your messes. The bad news is that this tax reform isn’t permanent – in fact, your opportunity to hit the button may not extend past this year!

As with any major reform, there are several items that remain somewhat vague. One of which is a nasty little thing called “CLAWBACK.”  This means that if Washington swings back to the other side of the political aisle and Tax Reform is reversed (which will probably happen if history repeats itself), then the IRS could reverse some of the reform backwards. As an example, imagine you worked on your estate plan in 2019 to get the estate taxes to a minimum. The IRS could come back and tax you for any gifts you made under the “clawback” provisions.

But wait! This does not mean do nothing. It just means do it in 2018, a year in which the “clawback” won’t reach.

We just got back from an incredible conference featuring some our nation’s most astute tax attorneys. They told story after story of messes that needed cleaning up and are finally getting cleaned up this year. Most people, families, and businesses that plan for issues (legal, risk, tax, financial, etc.) only do it once. They forget all the issues need to be reviewed - ANNUALLY. As planners we spend less time planning and more time cleaning up messes only after it’s too late.

An attorney’s favorite line is—please don’t plan, I get paid more this way. And that may well be true. If you don’t plan, you may end up paying a lot… but not just to an attorney or other professional. You pay Uncle Sam, you pay the government, you pay insurance companies, you pay brokers, and you pay undesired expense like a $6,000 per month healthcare facility.

Imagine if you were to hit that “Clean Up Button.” How would it feel? What would things look like? How would things be different? It is easier than you think—especially when we are here to help you every step of the way. We only have a few months left in 2018. Make a decision to plan today!