Comparing inter vivos and testamentary trusts

Creating and adhering to an estate plan is no simple task. Generally, the end goal of estate planning is to divide up and transfer assets to loved ones at minimal or zero tax cost. Of course, a will is a good starting point, but it may be supplemented by various other estate planning techniques, including trusts.

Trusts are essentially used to accommodate asset transfers beyond dispositions in a will. There are two main types of trusts: the inter vivos trust and the testamentary trust. Let’s take a closer look at each option.

Inter vivos trust

An inter vivos trust, sometimes called a “living trust,” is created during your lifetime. The trust may be irrevocable or revocable, depending on your needs and how it’s set up.

As the name implies, an irrevocable trust requires that you give up rights to revoke or revise the trust. For example, you can’t change the beneficiaries or otherwise amend the terms. With a revocable trust, you retain the right to make changes up until the time of death.

The assets in an irrevocable trust are removed from your taxable estate, while revocable trust assets aren’t. But the estate tax shelter is no longer as powerful an incentive as it used to be due to the generous federal gift and estate tax exemption. For 2024, the exemption amount is $13.61 million, up from $12.92 million in 2023. (In 2026, the exemption is scheduled to return to the 2017 amount of $5 million, plus inflation adjustments, unless Congress acts to extend the higher amount.)

A revocable trust gives you more flexibility in handling trust assets. For this reason, it’s generally the preferred type of inter vivos trust.

Regardless of whether the trust is irrevocable or revocable, assets are titled in the name of the trust, giving the trust legal ownership. When the grantor passes away, the designated beneficiaries are granted access to the assets, which are then managed by a successor trustee, based on the trust’s terms.

Most notably, the trust’s assets avoid probate, which can be a lengthy and costly process in some states. Also, probate is open to the public, so the inter vivos trust ensures privacy. Assets held in trust are seamlessly transferred to the intended recipients. This is usually the main benefit sought by parties creating an inter vivos trust.

Testamentary trust

As opposed to an inter vivos trust, a testamentary trust is created when the grantor passes away. It doesn’t officially become effective until the grantor’s death, and at that time it becomes irrevocable.

Unlike an inter vivos trust, your estate will likely have to pass through probate before a testamentary trust begins to operate. Once the trust is created by will, the executor adheres to the terms regarding transfers to the trust.

Because the trust must go through probate, it may be problematic if you use certain assets, such as real estate or securities. This may also cause concerns if the beneficiaries need fast access to funds.

Note that the testamentary trust may be coordinated with the gift and estate tax exemption, to ensure that your estate doesn’t encounter federal estate tax problems upon the transfer of assets. This type of trust allows you to maintain control over assets until death and provide future security for your heirs.

What’s the right trust for you?

There’s no right or wrong answer to that question. The choice between an inter vivos or testamentary trust often depends on your estate planning objectives, including tax implications and whether you prefer to avoid probate or to maintain control over assets. Turn to us for help in creating the right trust for you.

© 2024

There’s a new threshold for electronically filing information returns

Does your business file 10 or more information returns with the IRS? If so, you must now file them electronically. This is a significant rule change that went into effect on January 1, 2024, for 2023 tax year information returns.

The threshold for electronically filing most information returns has dropped from 250 to 10. Before the new rule, only businesses filing 250 or more information returns were required to do so electronically. Notably, the 250-return threshold was applied separately to each type of information return. Now, businesses must e-file returns if the combined total of all the information return types filed is 10 or more.

Final regulations on the new rule were issued February 21, 2023, by the U.S. Department of the Treasury and the IRS.

Affected information returns

The IRS reports that it receives nearly 4 billion information returns each year. And by 2028, the agency predicts it will receive over 5 billion information returns per year.

The final regs state that the new e-filing requirements will be imposed on those taxpayers “required to file certain returns, including partnership returns, corporate income tax returns, unrelated business income tax returns, withholding tax returns, certain information returns, registration statements, disclosure statements, notifications, actuarial reports, and certain excise tax returns.”

Here are just some of the forms involved:

• Forms 1099 issued to report independent contractor income, interest and dividend income, retirement plan distributions, prizes and other payments,

• Form W-2 issued to report employee wages,

• Form 1098 issued to report mortgage interest paid for the year, and

• Form 8300 issued to report cash payments over $10,000 received in a trade or business.

Note: January 31 is the deadline for submitting to the government W-2 wage statements, 1099-NEC forms for independent contractors and other forms. You can find an IRS guide to information returns and when they’re due here.

Penalties and exceptions

The IRS may impose penalties on companies that are required to e-file information returns but instead file them on paper. Filers who would suffer an undue hardship if they had to file electronically can request a waiver from the e-filing requirement by filing Form 8508 with the IRS. Contact us for more guidance on your information return filing obligations.

© 2024

Account-based marketing can help companies rejoice in ROI

When it comes to marketing, business owners and their leadership teams often assume that they should “cast a wide net.” But should you? If your company is looking to drive business-to-business (B2B) sales, a generalized approach to marketing could leave key customers and optimal prospects feeling like they’re receiving vague messages from a provider that doesn’t really know them. That’s where account-based marketing comes in.

Simply defined, account-based marketing is a strategy under which marketing and sales teams collaboratively focus on targeted high-value accounts. The objective is to create a customized experience for each account that locks in the buyer long-term through deep relationship building and personalized service.

Benefits and risks

The primary potential benefit of a successful account-based marketing campaign is return on investment (ROI). By focusing on customers and prospects most likely to invest substantial dollars in your products or services, you’ll better position yourself to win those odds and bring in substantial revenue. Indeed, the internet abounds with marketing surveys indicating that large percentages of responding B2B companies have gotten a higher ROI from account-based marketing than from other strategies.

Another potential benefit is better aligning marketing with sales. Many businesses struggle with mismatched messaging coming from the marketing and sales departments, respectively. This can lead to customer confusion and internal conflicts. Account-based marketing requires marketing and sales to work together to devise a unified, unique approach to each targeted account.

A third potential benefit is establishing your B2B company as an industry expert. In most industries, when word gets out that a company is successfully marketing directly to certain well-known players, that business’s reputation rises because, clearly, it “speaks the language.”

Of course, account-based marketing has its risks. The biggest one is, as you might’ve guessed, a negative ROI. You’ll need to invest substantial time and resources on each targeted account. If the initiative flounders, the resulting losses can be steep. You may also end up ignoring other customers or prospects. Your business could even hurt its reputation by interacting with a major industry player in a less than flattering way.

3 steps to success

So, how do you avoid those downsides? Here are a three general steps to success:

1. Create a framework. Before doing anything, your business will need a broad framework for executing an account-based marketing strategy. A good way to build one is to use a readily available template to map out the process. You’ll also need to form a dedicated account-based marketing team. You might even invest in specialized software to automate everything.

2. Choose your targets. This may be the most important step! You’ve got to pick the customers and prospects that are the best fits for account-based marketing. It’s generally best to start with a short list or even just one or two. Next, meticulously research key details about each business, such as its mission, size, revenue model and spending patterns. Also, identify the specific individuals you’ll need to win over within the target company.

3. Design, execute and analyze. As mentioned, you’ll need to design a customized campaign for each account. Do so with great care, relying on your research and meaningful interactions with contacts at the business in question. From there, be prepared to measure and analyze your results and iterate the campaigns as necessary.

A significant boost

Account-based marketing isn’t feasible for every business. But if you believe that messaging directly to a few key customers or prospects could give your B2B company’s sales a significant boost, it’s worth considering. For help projecting the results of an account-based marketing campaign, or assistance choosing and analyzing metrics for a campaign in progress, contact your FMD advisor.

© 2024

A power of attorney is a critical component of an effective estate plan

While much of your estate plan focuses on actions that take place after death, it’s equally important to have a plan for making critical financial or medical decisions if you’re unable to make them for yourself during your lifetime. This is why including a power of attorney in your estate plan is a must.

Defining a power of attorney

A power of attorney is defined as a legal document authorizing another person to act on your behalf. This person is referred to as the “attorney-in-fact” or “agent” — or sometimes by the same name as the document, “power of attorney.” Generally, there are separate powers of attorney for health care and property.

Be aware that a power of attorney is no longer valid if you become incapacitated. For many people, this is actually when the authorization is needed the most. Therefore, to thwart dire circumstances, you can adopt a “durable” power of attorney.

A durable power of attorney remains in effect if you become incapacitated and terminates only on your death. Thus, it’s generally preferable to a regular power of attorney. The document must include specific language required under state law to qualify as a durable power of attorney.

Naming your power of attorney

Despite the name, your power of attorney doesn’t necessarily have to involve an attorney, although that’s an option. Typically, in the case of a power of attorney for property, the designated agent is either a professional, such as an attorney, CPA or financial planner, or a family member or close friend. In any event, the person should be someone you trust implicitly and who is adept at financial matters. In the case of a health care power of attorney, a family member or close friend is the most common choice.

Regardless of whom you choose, it’s important to name a successor agent in case your top choice is unable to fulfill the duties or predeceases you.

Usually, the power of attorney will simply continue until death. However, you may revoke it — whether it’s durable or not — at any time and for any reason. If you’ve had a change of heart, notify the agent in writing about the revocation. In addition, notify other parties who may be affected.

Time is of the essence

To ensure that your health care and financial wishes are carried out, prepare and sign health care and financial powers of attorney as soon as possible. Don’t forget to let your family know how to gain access to the documents in case of emergency. Note that health care providers and financial institutions may be reluctant to honor a power of attorney that was executed years or decades earlier. Sign new documents periodically. Contact your FMD advisor with questions.

© 2024

The IRS unveils ERTC relief program for employers

Since July 2023, the IRS has taken a series of actions in response to what it has termed a “flood of ineligible claims” for the Employee Retention Tax Credit (ERTC). Most recently, it launched a Voluntary Disclosure Program (VDP). The program presents a valuable, but temporary, opportunity for eligible employers.

Flood of invalid ERTC claims

The ERTC is a refundable tax credit intended for businesses that 1) continued paying employees while they were shut down due to the pandemic in 2020 and 2021, or 2) suffered significant declines in gross receipts from March 13, 2020, to December 31, 2021.

With the credits worth up to $26,000 per retained employee, fraudulent promoters and marketers quickly pounced, offering to help employers file claims in exchange for large upfront fees or percentages of the money received. But the requirements for the credit are stringent, and many employers were misled into filing claims that have proven to be invalid, leaving those claimants at risk of liability for credit repayment, penalties and interest, as well as other tax problems.

IRS’s response

In the face of the deluge of invalid claims, the IRS intensified audits and criminal investigations of both promoters and businesses filing suspect claims. As of December 2023, it had more than 300 criminal cases underway with claims worth nearly $3 billion, and thousands of ERTC claims had been referred for audit.

The IRS also has instituted a moratorium on the processing of new ERTC claims. And, in October 2023, the agency began offering a withdrawal option for eligible employers that filed a claim but haven’t yet received, cashed or deposited a refund. Withdrawn claims will be treated as if they were never filed, so taxpayers need not fear repayment, penalties or interest.

In late December 2023, the IRS announced another ERTC relief initiative, the VDP. The program is intended for employers that claimed and received credit money but weren’t entitled to it.

VDP nuts and bolts 

Employers that participate in the VDP may benefit in several ways. For example, they’re required to repay only 80% of the credit received (if repayment in full isn’t possible, the IRS may authorize an installment plan). They also aren’t required to repay any interest received on an ERTC refund or amend their income tax returns to reduce wage expense.

These employers won’t be subject to penalties or underpayment interest if the 80% repayment is made before the signed closing agreement is returned to the IRS. The 20% reduction won’t be treated as taxable income, and the IRS won’t audit the ERTC on employment tax returns for the tax periods covered by the closing agreement.

An employer can apply for the VDP for each tax period in which:

• Its ERTC claim was 1) processed and paid as a refund that has been cashed or deposited, or 2) paid in the form of a credit applied to that or another tax period,

• It believes it wasn’t entitled to the ERTC,

• It isn’t under IRS audit for employment taxes,

• It isn’t under IRS criminal investigation, and

• The IRS hasn’t reversed, or notified the employer of its intent to reverse, the ERTC to zero (for example, with a letter or notice disallowing the credit).

Notably, the IRS is sending up to 20,000 letters with proposed tax adjustments for the 2020 tax year to recover ineligible claims, in addition to 20,000 denial letters it sent earlier. The agency continues to work on the 2021 tax year, with more mailings to come. When an employer is identified through this work as receiving excessive or erroneous ERTCs, the IRS will pursue normal tax assessment and collection procedures.

If a third-party payer filed an employment tax return that reported an employer’s ERTC-related wages and credits, the employer can participate in the VDP only through the third-party payer. It’ll be rejected if it applies with its own employer identification number.

Act now

Bear in mind that not every ERTC claim was invalid. If you’re at all uncertain about the validity of your claim, regardless of whether you’ve received payment, we can help you navigate this increasingly complex area of your tax liability. The VDP is open only until March 22, 2024, though, so don’t delay.

© 2024

Did your business buy the wrong software?

No one likes to make a mistake. This is especially true in business, where a wrong decision can cost money, time and resources. According to the results of a recent survey, one of the primary ways that many companies are committing costly foibles is buying the wrong software.

The report in question is the 2024 Tech Trends Survey. It was conducted and published by Capterra, a company that helps businesses choose software by compiling reviews and offering guidance. The study focuses on the responses of 700 U.S.-based companies. Of those, about two-thirds regretted at least one of their software purchases made in the previous 12 to 18 months. And more than half of those suffering regret described the financial fallout of the bad decision as “significant” or “monumental.”

Yikes! Clearly, it’s in every business’s best interest — both financially and operationally — to go slow when it comes to buying software.

Inquiring minds

The next time you think your company might need new software, begin the decision-making process with a series of inquiries. That is, sit down with your leadership team and ask questions such as:

• What functionalities do we need?

• Are we talking about an entirely new platform or an upgrade within an existing platform?

• Who will use the software?

• Are these users motivated to use a new type of software?

Compatibility is an issue, too. If you’re using an older operating system, new software could be buggy or flat-out incompatible. In either case, you could incur substantial additional costs to update or replace your operating system, which might involve new hardware and impact other software.

When deciding whether and what to buy, get input from appropriate staff members. For example, your accounting personnel should be able to tell you what types of reports they need from upgraded financial management software. From there, you can differentiate “must haves” from “nice to haves” from “needless bells and whistles.”

If you’re considering changes to “front-facing” software, you might want to first survey customers to determine whether the upgrade would really improve their experience.

Prequalified vendors

When buying software, businesses often focus more on price and less on from whom they’re buying the product. Think of a vendor as a business partner — that is, an entity who won’t only sell you the product, but also help you implement and maintain it.

Look for providers that have been operational for at least five to 10 years, have a track record of successful implementations and can provide references from satisfied customers. This doesn’t mean you shouldn’t buy from a newer vendor, but you’ll need to look much more closely at its background and history.

For each provider, find out what kind of technical support is included with your purchase. Buying top-of-the-line software only to find out that the vendor provides poor customer service is usually a quick path to regret. Also, is training part of the package? If not, you’ll likely need to send one or more IT staffers out for training or engage a third-party trainer, either of which will cost you additional dollars.

Your goal is to create a list of prequalified software vendors. With it in hand, you can focus on comparing their products and prices. And you can use the list in the future as your software needs evolve.

No remorse

“Regrets, I’ve had a few,” goes the famous Sinatra song. Buying the wrong software doesn’t have to be one of them for your business. We can help you identify all the costs involved with a software purchase and assist you in ensuring a positive return on investment.

© 2024

3 types of internal benchmarking reports for businesses

As each year winds to a close, owners of established businesses can count on having plenty of at least one thing: information. That is, they have another full calendar year of financial results to peruse, parse and ponder over.

Indeed, you shouldn’t let this valuable data go to waste. Within your company’s financial statements lies a treasure trove of insights that can help you spot trends, both positive and negative.

That’s where benchmarking comes in. It can take several forms, but let’s focus on three types of internal benchmarking reports that can be particularly useful.

1. Horizontal analysis

A relatively easy starting point is to put two of your company’s financial statements side by side and compare them. In accounting, a comparison of two or more years of financial data is known as horizontal analysis. Differences between the years are typically shown in dollar amounts or percentages.

Naturally, what you’re hoping to find is growth. For instance, if accounts receivable increased from $1 million in 2022 to $1.2 million in 2023, that’s a difference of $200,000 or 20%. Horizontal analysis helps identify such trends. It’s then up to you and your leadership team to explain what caused them and, in the case of this example, keep that trendline moving in a positive direction.

You can also use horizontal analysis to sharpen your understanding of your business’s profitability. While public companies usually focus on earnings per share, private companies generally want to look at profit margin and gross margin. Rather than analyze only the top and bottom of the income statement (revenue and profits), you may want to drill down and compare individual line items such as the cost of materials, rent, utilities and payroll.

2. Vertical analysis

Vertical analysis works its magic within one year’s financial statements. Essentially, each line item in that set of financial statements is converted to a percentage of another item — often revenue or total assets. Accountants typically refer to financial statements that have been subject to vertical analysis as “common-size” financial statements.

For example, a common-size income statement that shows each line item as a percentage of revenue would explain how each dollar of revenue is distributed between expenses and profits. Alternatively, from a profitability standpoint, vertical analysis could show the various expense line items in the income statement as a percentage of sales. This would show whether and how these line items are contributing to your profit margin.

3. Ratio analysis

Ratios also depict relationships between various items on a company’s financial statements. For instance, profit margin equals net income divided by revenue. Ratios are typically used to benchmark a business against its competitors or industry averages. But you can use ratios internally as well.

Within a single set of financial statements, for example, you might calculate total asset turnover (revenue divided by total assets). This ratio estimates how many dollars in revenue the business generated for every dollar it invested in assets. Generally, the more dollars earned, the better. You can also, of course, compare ratios from one year to the next or over longer periods.

Know your options

Many companies use a combination of horizontal, vertical and ratio analyses over time to highlight positive trends and catch operating inefficiencies. What’s important is knowing your benchmarking options and maximizing the value that your financial statements can provide. For help choosing and executing the optimal benchmarking methods for your company, contact your FMD advisor.

© 2024

Perform an operational review to see how well your business is running

In the wide, wide world of mergers and acquisitions (M&A), most business buyers conduct thorough due diligence before closing their deals. This usually involves carefully investigating the target company’s financial, legal and operational positions.

But why let them have all the fun? As a business owner, you can perform these same types of reviews of your own company to glean critical insights.

Now you can take a deep dive into your financial or legal standing — and certainly should if you think something is amiss. But assuming all’s well, the start of a new year is a good time to perform an operational review.

Why to do it

An operational review is essentially a reality check into whether, from the standpoint of day-to-day operations, your company is running smoothly and fully capable of accomplishing its strategic objectives.

For example, let’s say a business relies on superior transportation logistics as a competitive advantage. Such a company would need to continuously ensure that it has the right people, vehicles and technology in place to remain a major player. The point is, you don’t want to fall behind the times, which can happen all too easily in today’s environment of disruptors and rapid technological change.

Before getting into specifics, gather your leadership team and ask yourselves some big-picture questions such as:

• Are our IT systems up to date and secure, or will they soon need substantial upgrades to keep our data safe and our business competitive?

• Are our production facilities capable of handling the output we intend to work toward in the coming year?

• Are staffing levels across our various departments appropriate, or will we likely need to expand, contract or reallocate our workforce this year?

By listening to members of your leadership team, and perhaps even some key employees on the front line, you can gain a sense of your staff’s operational confidence. If they have concerns, better to address them sooner rather than later.

What to look at

Getting back to M&A, when business buyers perform operational due diligence, they tend to evaluate at least three primary areas of a target company. As mentioned, you can do the same. The areas are:

1. Production/operations. Buyers scrutinize mission-critical functions such as technological obsolescence, supply chain operations, procurement processes, customer response times, and product or service distribution speed. They may even visit production facilities and interview certain employees. Their goal, and yours, is to spot performance gaps, identify cost-cutting opportunities and determine ways to improve productivity.

2. Selling, general & administrative (SG&A). This is a financial term that summarizes a company’s sales-related expenses (including sales staff compensation and advertising costs) along with its administrative costs (such as executive compensation and certain other general expenses). A SG&A analysis is a way for business buyers — or you, the business owner — to assess whether the company’s operational expenses are too high or too low.

3. Human resources (HR). Buyers typically review a target business’s organizational charts, staffing levels, compensation and benefits, and employee bonus or incentive plans. They also look at the tone, quality and substance of communications between HR and staff. Their goal — and yours too — is to determine the reasonability and sustainability of each of these things.

A funny question

Would you buy your company if you didn’t already own it? It may seem like a funny question, but an operational review can tell you, objectively, just how efficiently and impressively your business is running. We’d be happy to help you gather and analyze the pertinent information involved.

© 2024

Pay attention to securities laws when planning your estate

Do your assets include unregistered securities, such as restricted stocks or interests in hedge funds or private equity funds? If so, it’s important to consider the securities laws that may be involved in various estate planning strategies.

Potential estate planning issues

Transfers of unregistered securities, either as outright gifts or to trusts or other estate planning vehicles, can raise securities law issues. For example, if you give restricted securities to a child or other family member, the recipient may not be able to sell the shares freely. A resale would have to qualify for a registration exemption and may be subject to limits on the amount that can be sold.

If you plan to hold unregistered securities in an entity — such as a trust or family limited partnership (FLP) — be sure that the entity is permitted to hold these investments. The rules are complex, but in many cases, if you transfer assets to an entity, the entity itself must qualify as an “accredited investor” under the Securities Act or a “qualified purchaser” under the Investment Company Act. And, of course, if you plan to have the entity invest directly in such assets, it’ll need to be an accredited investor or qualified purchaser.

Accredited investors include certain banks and other institutions, as well as individuals with either 1) a net worth of at least $1 million (excluding their primary residence), or 2) income of at least $200,000 ($300,000 for married couples) in each of the preceding two years.

A trust is an accredited investor if:

• It’s revocable, the grantor is an accredited investor and certain other requirements are met,

• The trustee is a bank or other qualified financial institution, or

• It has at least $5 million in assets, it wasn’t formed for the specific purpose of acquiring the securities in question and its investments are directed by a “sophisticated” person.

FLPs and similar family investment vehicles are accredited if 1) they have at least $5 million in assets and weren’t formed for the specific purpose of acquiring the securities in question, or 2) all its equity owners are accredited.

Qualified purchasers include individuals with at least $5 million in investments; family-owned trusts or entities with at least $5 million in investments; and trusts, not formed for the specific purpose of acquiring the securities in question, if each settlor and any trustee controlling investment decisions is a qualified purchaser.

Complex rules

Federal securities laws and regulations are complex. Indeed, a full discussion of them is beyond the scope of this article. If your assets include unregistered securities, consult with your FMD advisor to be sure your estate planning strategies comply with applicable securities requirements.

© 2024

Have you made and communicated your funeral arrangements?

One aspect of estate planning that isn’t always covered is the ability to make your funeral arrangements in advance. Of course, for many people it can be difficult to think about their mortality. Indeed, it’s not surprising to learn that many put off planning their own funerals. Unfortunately, this lack of planning may result in emotional turmoil for surviving family members when someone dies unexpectedly.

Also, a death in the family may cause unintended financial consequences. Why not take matters out of your heirs’ hands? By planning ahead, as much as it may be disconcerting, you can remove this future burden from your loved ones.

What are your wishes?

First, make your funeral wishes known to other family members. This typically includes instructions about where you’re to be buried or cremated, if you prefer a formal or religious ceremony, and even the clothing you’ll be buried in.

Your instructions may also cover a memorial service in lieu of, or supplementing, a funeral. If you don’t have a next of kin or would prefer someone else to be in charge of funeral arrangements, you can appoint another representative.

Be aware that the methods for expressing these wishes vary from state to state. With the help of your attorney, you can include a provision in your will, language in a health care proxy or power of attorney, or a separate form specifically designed for communicating your funeral arrangements.

Whichever method you use, it should, at a minimum, state 1) whether you prefer burial or cremation, 2) where you wish to be buried or have your ashes interred or scattered (and any other special instructions), and 3) the person you’d like to be responsible for making these arrangements. Some people also request a specific funeral home.

Should you consider a prepaid funeral?

There’s a division of opinion in the financial community as to whether you should prepay funeral expenses. If you prepay and opt for a “guaranteed plan,” you lock in the prices for the arrangements, no matter how high fees may escalate before death. With a “nonguaranteed plan,” prices aren’t locked in, but the prepayment accumulates interest that may be put toward any rising costs.

When weighing whether to use a prepaid plan, the Federal Trade Commission recommends that you ask the following questions:

• What happens to the money you’ve prepaid?

• What happens to the interest income on prepayments placed in a trust account?

• Are you protected if the funeral provider goes out of business?

Before signing off on a prepaid plan, learn whether there’s a cancellation clause to the plan in the event you change your mind.

What is a POD bank account?

One alternative that avoids the pitfalls of prepaid plans is to let your family know your desired arrangements and set aside funds in a payable-on-death (POD) bank account. Simply name the person who will handle your funeral arrangements as beneficiary. When you die, he or she will gain immediate access to the funds in that account without the need for probate.

© 2023