Do I need a lawyer or a CPA or a ???
November 18, 2014 8:41 AM   Subscribe

Last year, little baby iminurmefi was born, and while I know that there's a grace period where you can say "I just had a baby!" to excuse temporarily dropping the ball on all sorts of life stuff, it's about year past when my husband and I should have gotten our crap together and done that legal... stuff (that's the technical term)... that you're supposed to do when you have a kid and a house and assets and newly-complicated taxes. Estate planning, I guess? I know AskMe can't do this for me, but I am a bit lost as to what sort of professional(s) I need to hire here.

At a minimum, I know we're a year past the point at which we should have gotten a will and designated financial planning and guardianship should both my husband and I kick the bucket. I am guessing one needs a lawyer for this, but I have the feeling that it might be more efficient (read: cheaper) if we show up with a solid idea of what we want done and how that intersects with more general tax and estate planning, and this is where I get stuck. Do I need to see a CPA or financial planner first? Or do some research / read a book to prepare? (I love to research financial stuff, I did my own taxes for years by hand and am a sicko who says things like "Actually, IRS publications about deductions are very well-written and understandable to a layman!", so I'm happy to do legwork about options, I just don't know where to start.)

On the tax front, in addition to the arrival of the most awesome member of the family in 2014, we also finally got legally married in 2013 and bought a house in 2012. Last year's taxes were done on TurboTax in the postpartum haze but I imagine this year it might make sense to go to an actual person for tax advice or preparation. We're a two-income family in a high COL area and I have a very vague sense that the AMT might be out there on the horizon somewhere now that we're legally married, which is another reason I thought it might make sense to get actual expert tax advice.

Last complication: it would be nice if said professional could give us advice about my parents' general plans for their own estate planning, which give me a heartburn sometimes because they're trying to do things on the cheap without paying a lawyer and I worry about liability, asset protection, and/or IRS audit concerns with some of their plans that they are asking me to go along with. (For example, forming an LLC where all the family members are partners, for some reason I can't quite understand.) I'm not clear on whether a CPA could provide decent advice here, or whether this kicks things to the "must have a JD and bill twice as much" level. I'm hoping it's not the latter, but if it is, c'est la vie.

So: you are not my lawyer, but maybe you are a lawyer or a CPA or professional who knows the field well enough to tell me what sort of professional I need to go hire.
posted by iminurmefi to Work & Money (13 answers total) 5 users marked this as a favorite
Dude, this is much easier than you're thinking. I felt guilty about not planning for Wee Thumbscrew's future for YEARS, then I finally went to a lawyer. It took, like, three hours and less money than a fancy pair of shoes, and I was SET UP... all the documents I needed, notarized, done. The relief was immense. Call your state or local bar association's lawyer referral service and ask for an estate planning attorney. You'll be amazed how easy it is.
posted by julthumbscrew at 8:51 AM on November 18, 2014 [6 favorites]

Congratulations! As far as who to work with, lots of family/estate lawyers operate on a flat fee for relatively simple situations, which yours sounds like. Or if one of you can sign up for a prepaid legal plan through work, it will pay for itself by covering this stuff. A lawyer really is the right person for most of this -- it's worth at least finding one who offers a free consultation to get their read on what you need. Definitely go for someone experienced in your jurisdiction; I recently had cause to deal with a will that was written by a lawyer fresh out of law school and it was a hot mess that is causing all sorts of problems in probate.
posted by katemonster at 8:53 AM on November 18, 2014

If you love to research financial stuff, there's no need to hire anyone for the first two items. Get WillMaker, take an hour or so to read it, and then answer the questions: Pouf, you have a will. The hardest part here is figuring out who's taking the kid, but hopefully you're already thought about that and talked to the person.

You should also both need life insurance if you don't already have it. The only hard part is figuring out the amount, but there are plenty of online resources to help with that.

Unless you have an unusual tax situation (small business, rental property, interest in overseas oil wells), TurboTax is fine.

Actual financial professionals will tell you to hire someone, because they are constantly cleaning up messes. (Note however that there's a bit of a selection bias, because they don't see the cases that go smoothly.) If you are worried about that, find someone you can hire to review your WillMaker will or TurboTax tax return and flag any problems.
posted by Mr.Know-it-some at 8:58 AM on November 18, 2014 [1 favorite]

Handle the legal stuff first - downsides of not having it are very great, if something happens. Most lawyers who focus on this work will be able to give you a package deal, very simple. You can always make changes later. Biggest thing is to make sure you and the other parent are in agreement about potential guardians if something happens to you. For leads, ask on some new parents' list or at a baby support location that has breastfeeding counsults, etc. Places like that often bring in lawyers to give a presentation and then you can get a discount if you use them.

Then work with a fee-only financial planner for your household finances, short- and long-term views. Get references from this person on a tax preparer, and go see 2-3 to understand what their services and packages are. Said tax person should be able to give you, based on a phone call or single meeting, a list of items you need to provide him/her to prepare your taxes. Even if your taxes end up being fairly simple--to them or to you--it's worth it for the first year of big changes and when you've got a lot on your hands because there's huge peace of mind knowing it was done well and you can follow their lead in subsequent years if you're so inclined.
posted by cocoagirl at 9:00 AM on November 18, 2014

Best answer: Start with Get Your Shit Together.

Meet with an estate planning attorney, who will likely have a flat fee to draft all necessary documents (wills, powers of attorney, health care proxies, etc).

For the tax stuff, engage a CPA for tax prep this year (now is the time to start looking). Ask coworkers and friends for recommendations.

For your parents' stuff, an estate planning attorney with elder care experience is probably your best bet. Your attorney may be able to review the documents that you are a party to, so that you can better understand them.
posted by melissasaurus at 9:03 AM on November 18, 2014

I also highly recommend the ABA's toolkit for health care advance planning.
posted by melissasaurus at 9:05 AM on November 18, 2014

Most people who own property (and/or significant assets) are better off with a living trust instead of a will, which is definitely not something you should try to DIY. As recommended above, I'd definitely talk to an attorney who specializes in estate planning to start.
posted by insectosaurus at 9:09 AM on November 18, 2014

Response by poster: Now that I'm seeing everyone's answers, I'm feeling kind of foolish that I assumed the tax-preparation and will-making piece were related. Totally makes sense to just knock the will/guardianship/healthcare proxy/estate planning for our son out of the way first, since it's the piece I feel most badly about in terms of potential negative consequences.

To clarify, the estate planning stuff with my parents is *not* along the lines of "will they have enough assets to pay for medical care in their dotage", it's more along the lines of... they want me to enter into legal/financial partnerships with them (like joining an LLC or corporation with them and their business) and I'm leery about the potential effects that may have on my taxes or my liability should their business get sued. melissasaurus or other lawyers, is this the sort of thing an estate planning attorney is best-equipped to handle, or should I be looking for an attorney that specializes in business/corporation stuff (again, the highly technical term because I'm a bit clueless here!). A lot of my concern is around how this may affect my taxes, which is why I'm wondering if a CPA could give competent advice on this front, but I'm not sure whether a CPA has knowledge base broad enough to give me advice on asset protection if I go along with my parents' (possibly dodgy, possibly totally legit) plans.
posted by iminurmefi at 9:16 AM on November 18, 2014

Best answer: If they're trying to do a family limited partnership, an estate planning attorney would be knowledgeable in that area.
posted by melissasaurus at 9:19 AM on November 18, 2014

I did all this stuff myself (err well my wife did) on LegalZoom. Paid for the advice service and they gave some. It was mega easy (but then we have few assets).
posted by Potomac Avenue at 10:27 AM on November 18, 2014

Best answer: My experience was that my estate planning attorney did not have enough information to advise us fully on asset protection including specifically, LLCs/family limited partnerships - because we are in high liability field, this is a common method utilized to try to protect assets. Fortunately for us he was honest in saying that this was not his expertise and providing us with contact information for other lawyers who specialized in asset protection.

We did get wills, healthcare proxies, powers of attorney, and paperwork that would set up a trust for our daughter arranged - it cost more than julthumbscrew's, I think, because the end cost for these documents being done for both of us was $2350. But we felt it was worth it for the peace of mind, for sure - we have significant assets because we are in high paying jobs and thus although otherwise I am a DIY type of person (who sold my own home and did the legal side of the paperwork myself, usually used to do taxes myself with Turbotax) I would not have done an online form for this, as I want to ensure my family's assets and my estate are safe and are going to be dealt with the way I want them to be.
posted by treehorn+bunny at 11:34 AM on November 18, 2014

TurboTax can handle AMT. What you might want to do is pay for an hour of time with an accountant (before tax season starts) just to get some advice on what you should pay attention to but do the actual data entry and calculations yourself.

In terms of your own wills, I would consider (1) the probability of the estate being large enough that you have to pay estate taxes, especially when the second one dies and (2) are you OK with your children getting full control over their inheritance (at least whatever is left of it) when they become adults. If either of these are issues, pay a lawyer to make sure you are doing it right. If not, you might consider a do-it-yourself solution with the option of revising it if you find yourself wealthier when you get older.
posted by metahawk at 1:39 PM on November 18, 2014 [1 favorite]

When you consult with a lawyer about estate planning, ask about your parents' suggestions, and if he does not have the needed expertise he can guide you in the right direction.

The parents' suggestions are probably innocuous and beneficial, but there can be pitfalls. A shareholder in a corporation or a member of an LLC, not involved in the business, is not liable for its obligations in general. That is why those entities exist.

But I have seen this: a man worked for a restaurant for a while, moved up to manager, then was offered the title of president of the small corporation, but with no additional compensation. Two years later, the business failed, the majority owner died, and the IRS announced that he was personally responsible for over $180,000 in unpaid withholding taxes because he was, after all, an officer of the corporation.

That is why you need legal advice for things like that.
posted by megatherium at 4:40 AM on November 19, 2014

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