Prepare for the Future Before It's Here

Physician's Money DigestMay 2005
Volume 12
Issue 8

Dead or alive, Uncle Sam will gethis share. Even after you'redead, the IRS can audit past taxreturns. If you fudged deductions,underreported income, or goofed up,the surviving taxpayer whose signatureappears alongside yours on joint taxreturns and/or your estate could be heldaccountable for unpaid taxes, accruedinterest, and penalties.

American Way Woes

In most American households, eventhose in which both partners work fulltime, one spouse generally takes on theresponsibility of preparing the incometax returns. This often leaves the otherpartner in the dark when it comes to theinformation reported, the number ofdeductions made, and sometimes thelocation of this important information.

The absence of tax statements potentiallyleaves the surviving partnerdefenseless if they're ever faced with anaudit or are asked by the IRS to handover information to back up certaindeductions. Although there are tax professionalswho argue cases with the IRS,they don't come cheap—expect to paybetween $250 and $300 per hour. Thesefees can add up quickly, depleting assetsearmarked for the surviving partner'sfuture financial security.

Even if the surviving partner is neveraudited or challenged by the IRS, theywill still need ready access to previousincome tax returns; so too will anyoneappointed to handle estate matters. Tosettle the estate, it's necessary to filefinal federal, state, and estate taxreturns, as well as take care of a numberof other important financial issues.

Preparation is Key

Fortunately, you can make your family'slife easier with a very simple solution:organization. And with tax season barelybehind us, now's the perfect time toget things in order. Put all your incometax-related material in a safe placewhere your partner and appointedestate administrators can easily find it.Then, let these folks know the location.

You can also make things easier foryour loved ones by thinking ahead.Nobody likes to be left behind. But forthose family members who are, you canmake their lives a little better by keepingin mind the following 10 don'ts andapplying them to your life:

  • Don't make your loved ones fight overfuneral arrangements and final wishes.
  • Don't force your loved ones to go onan all out scavenger hunt for importantpersonal documents.
  • Don't forget to share with yourspouse and estate administrators whereyou keep the combination to the safe, thespare key, and your computer password.
  • Don't discount the value of detailingyour family's medical history.
  • Don't fail to provide the names andnumbers of your lawyer, financial advisor,minister, and close friends.
  • Don't fail to detail what bills shouldbe paid first and who owes you money.
  • Don't bequeath assets without instructionsfor intended use.
  • Don't forget to provide informationabout the care and well-being of any pets.
  • Don't leave your family wonderingabout unsaid feelings.
  • Don't forget to tell your spouse andestate administrator where you keepimportant valuables.


Beneficiary Book: A Family Information


For more information on this subject,visit The Website allows visitors to download a freesix-page supplement to the tome . The supplement includes achecklist on how to settle an estate andprovides fill-in forms to list importantpeople, places, and things.

is a retired estate

and financial planner who has

helped families economically and

emotionally prepare for the

inevitable for more than 30 years.

He wrote The Beneficiary Book: A

Family Information Organizer (Active Insights;

1992), an information publication with fill-in-theanswer

worksheets that offers a convenient place

to record, organize, and centralize final testimonies.

For more information, call 800-222-9125

or visit

Martin Kuritz

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