Considering Tax Implications in Financial Planning

Last Modified: May 2, 2010

Share article


Question

Dear OncoLink "Ask The Experts,"

I have terminal cancer and I want to be sure that my possessions and what little money I have goes to my only son with as little interference from Uncle Sam. Are there groups that help people with cancer make financial arrangements & decisions at discount cost?

Answer

William J. Wahl III, Financial Advisor at Rockwell Associates and Friend of OncoLink, responds:

That is a very good question. I believe I can offer some direction for you.
Looking for discounts is not what you should focus on; as this type of planning can be accomplished at minimal to no cost to you.

Options that are available to you to achieve this will vary depending on your personal situation, the age of your son, and the types of assets you have.

Through legal channels you could work with and attorney to have a revocable trust established in your name with your son listed as the sole beneficiary of the trust. You would than need to re-assign all of your accounts and assets to the trust rather than yourself. Look for an attorney that charges a flat rate for this service and not hourly billing. I have seen the cost of revocable trusts range from $150 to $500.
Through Financial channels, it will depend on the types of assets you have. Qualified (or Tax-deferred) accounts such as IRAs and 401k’s all have beneficiary designations, which you control. These types of accounts offer the beneficiary different options that allow them to manage the tax liability of this inheritance.

Money or investments held in non-qualified accounts (such as brokerage accounts, money markets, and savings accounts) will all be taxed as income to the beneficiary. However, you could consider repositioning these assets into financial products that would allow a tax advantaged transfer to your son.

A financial advisor can help you determine the best course to accomplish this. Look for an advisor that does not charges for time or consultations. A good advisor can assist you in updating beneficiary designations and the repositioning of assets at minimal to NO out of pocket expense.

This question and answer was part of the OncoLink Brown Bag Chat Series, Legal & Financial Challenges Facing People with Cancer. View the entire transcript here.


News
Minority patients more willing than whites to expend their financial resources to prolong life

Apr 27, 2011 - Black cancer patients are more willing to expend their personal financial resources in order to extend life compared to white cancer patients, according to a study published online April 26 in Cancer.



I Wish You Knew

How an oncology social worker can improve your cancer experience

View More



Blogs and Web Chats

OncoLink Blogs give our readers a chance to react to and comment on key cancer news topics and provides a forum for OncoLink Experts and readers to share opinions and learn from each other.




OncoLink OncoPilot

Facing a new cancer diagnosis or changing the course of your current treatment? Let our cancer nurses help you through!

Learn More