Q & A

Frequently Asked Questions

Q. What happens if I die without a Will?

A. The majority of people do not have a plan in place. If you don't have a Will you give up the right to direct who will receive your assets when you die. Instead you have chosen to let the state in which you live determine who will receive your assets. Contrary to popular belief, your assets are not divided equally among your heirs if you die without a plan in place. Each state has an order in which one group will receive; the next group will only receive if there is no one in the first group. For example: If you have a spouse, that spouse receives everything--unless you also have children. Spouse and children would share. If you have no spouse and no children, your parents inherit everything. If you have no living parents, your siblings inherit everything. It progresses from there. So, if you are single with no children and want your sibling to receive your favorite piece of jewelry or Amazon stock, they won't if your parents are living and you don't have a will. If you want your uncle who raised you to receive your house, he won't if your grandparents are living and you don't have a will.

Q. I work at a regular job and my salary is less than $100,000. What’s the point of me preparing an estate plan?

A. Actually, you already have a plan. The state you live in has laws that dictate what happens to your stuff when you die. The question is whether you want to be the person deciding how your assets are disposed of or if you want to leave that up to the state intestacy laws. You also need to consider what would happen if you become incapacitated and can't speak for yourself. Having your own plan in place will provide instructions on how you should be cared for and who can make decisions for you while you are incapacitated.

Q. I don’t have any children, so I don’t need a plan, right?

A. Planning is for yourself and for others in your life. Having your own plan in place can reduce the emotional burden that your loved ones would feel as a result of your incapacity or death.

Q. I’m not married so I don’t need a plan, right?

A. As a single person have you considered what would happen to you or your stuff if you become temporarily incapacitated? Without your own plan in place would your family member or loved one have to spend money going to court to gain control of your property? You need your own plan in place regardless of your marital status.

Q. What is the minimum value of assets I have to own in order to work with you?

A. There is no minimum level of wealth to work with me. I believe that everyone needs a plan in place regardless of the amount of your assets.

Q. How long does a Life and Legacy Planning Session take?

A. I block off two hours of my time to meet with you during a Life and Legacy Planning Session. We will discuss everything you own and the people that you love as we cover the plan the state has in place for you.

Q. Why do I have to go through a planning session? Can’t you just prepare a quick will for me?

A. In my opinion it is only through a full discussion of everything that you own and everyone that you love that I can properly advise you on the best plan for you. Our discussion will also bring clarity for you as you choose your own fee based on your budget and the level of protection that you want.

Q. What is Probate?

A. Probate is a court-supervised procedure that helps to ensure the legal transfer of assets from the deceased to the rightful heirs or beneficiaries. Probate is usually also necessary to:

  1. Prove the validity of the will
  2. Appoint someone to manage the estate (The “administrator” if there is no will or the “executor” if there is one)
  3. Inventory and appraise the estate property
  4. Pay any debts or taxes (including estate taxes)
  5. Distribute the property as directed by the will—or by the state law if there is no will

How is a Probate Started?

Although any beneficiary or creditor can initiate probate, normally the person named in the will as the Executor starts the process by filing the original will with the court and filing a Petition with the probate court. If there is no will, typically a close relative of the decedent who expects to inherit from the estate will file the Petition.

How long does Probate take?

The length of time of a probate will depend on several factors. It usually takes a minimum of 6 months and can take up to two years or even longer for complex cases.

FAQ cont’d with taxes

Q. Why did the IRS select me for an audit?

A. Selection for an audit does not always suggest there’s a problem. The IRS uses several different methods as described on their website:

Random selection and computer screening - sometimes returns are selected based solely on a statistical formula. The IRS compares your tax return against “norms” for similar returns. The IRS develops these “norms” from audits of a statistically valid random sample of returns, as part of the National Research Program the IRS conducts. The IRS uses this program to update return selection information.

Related examinations – The IRS may select your returns when they involve issues or transactions with other taxpayers, such as business partners or investors, whose returns were selected for audit.

Next, an experienced auditor reviews the return. They may accept it; or if the auditor notes something questionable, they will identify the items noted and forward the return for assignment to an examining group.

Note: filing an amended return does not affect the selection process of the original return. However, amended returns also go through a screening process and the amended return may be selected for audit. Additionally, a refund is not necessarily a trigger for an audit.

Q. How does the IRS notify me that I’ve been selected for audit?

A. If your account be selected for audit, the IRS will notify you by mail. They won’t initiate an audit by telephone.

Q. How is an IRS audit conducted?

A. The IRS manages audits either by mail or through an in-person interview to review your records. The interview may be at an IRS office (office audit) or at the taxpayer's home, place of business, or accountant's office (field audit). Remember, you will be contacted initially by mail. The IRS will provide all contact information and instructions in the letter you will receive.

If they conduct your audit by mail, their letter will request additional information about certain items shown on your tax return such as income, expenses, and itemized deductions. If you have too many books or records to mail, you can request a face-to-face audit. The IRS will provide contact information and instructions in the letter you receive.

Depending on the issues in your audit, IRS examiners may use one of the Audit Techniques Guides to assist them. These guides are located on IRS.gov and  will give you an idea of what to expect.

Q. What do I need to provide for the audit?

A. The IRS will provide you with a written request for the specific documents they want to see. Here’s a listing of records the IRS may request.

The IRS accepts some electronic records that are produced by tax software. The IRS may request those in lieu of or in addition to other types of records. Contact your auditor to determine what they can accept. Always send copies, not your original documents, unless you are specifically requested to do so.

The law requires you to keep all records you used to prepare your tax return – for at least three years from the date the tax return was filed.

Q. How do I know if the IRS received my response?

A. For any delivery service you may use, always request written confirmation that the IRS has received it. For example, if you use the US Postal Service, you can request one of their additional services to ensure delivery confirmation.

Q. What if I need more time to respond?

A. For audits conducted by mail - fax your written request to the number shown on the IRS letter you received. If you are unable to submit the request by fax, mail your request to the address shown on the IRS letter. They can ordinarily grant you a one-time automatic 30-day extension. They will contact you if they are unable to grant your extension request. However, if you received a “Notice of Deficiency” by certified mail, the IRS cannot grant additional time for you to submit supporting documentation. You may continue to work with them to resolve your tax matter, but they cannot extend the time you have to petition the U.S. Tax Court beyond the original 90 days. The IRS does not have authority to extend the 90 days because the deadline is based on federal law.

Q. What is the statute of limitations (or assessment period)?

A. The statute of limitations limits the time allowed to assess additional tax. It is generally three years after a return is due or was filed, whichever is later. There is also a statute of limitations for making refunds. If an audit is not resolved, the Service may request extending the statute of limitations for assessment of tax. Extending the statute gives you more time to provide further documentation to support your position; request an appeal if you do not agree with the audit results; or to claim a tax refund or credit if that is part of the extension agreement. It also gives the IRS time to complete the audit and provides time to process the audit results.

You don’t have to agree to extend the statute of limitations date. However if you don’t agree, the auditor will be forced to make a determination based upon the information provided. This is because the IRS cannot by law make a valid assessment after the assessment period has expired. Once the Notice of Deficiency is mailed to you the assessment period is tolled until your case is resolved, usually through a court proceeding.

You can find more information about extending a statute of limitations in Publication 1035, Extending the Tax Assessment Period, from your auditor ot on www.irs.gov.

Q. How long does an audit take?

A. The length varies depending on the type of audit; the complexity of the issues; the availability of information requested; the availability of both parties for scheduling meetings; and your agreement or disagreement with the findings.

Q. What are my rights?

A. Publication 1, Your Rights as a Taxpayer (found on www.irs.gov), explains your rights as a taxpayer as well as the examination, appeal, collection, and refund processes. These rights include:

A right to professional and courteous treatment by IRS employees.
A right to privacy and confidentiality about tax matters.
A right to know why the IRS is asking for information, how the IRS will use it and what will happen if the requested information is not provided.
A right to representation, by oneself or an authorized representative.
A right to appeal disagreements, both within the IRS and before the courts.
How does the IRS conclude an audit?
An audit can be concluded in three ways:

No change: an audit in which you have substantiated all of the items being reviewed and results in no changes.
Agreed: an audit where the IRS proposed changes and you understand and agree with the changes.
Unagreed: an audit where the IRS has proposed changes and you understand but disagree with the changes.

Q. What happens when you agree with the audit findings?

A. If you agree with the audit findings, you will be asked to sign the examination report or a similar form depending upon the type of audit conducted.

If you owe money, there are several payment options available. Publication 594, The IRS Collection Process (found on www.irs.gov), explains the collection process in detail.

Q. What happens when you disagree with the audit findings?

A. You can request a conference with an IRS manager. The IRS also offers mediation or you can request to meet with the Appeals division if there is enough time remaining on the statute of limitations.