Wayne Independent - Honesdale, PA
Winter Wonderland 2019
- Page 6
By: Charles Curtin, JD, LLM, CTFA Trust Officer
The Honesdale National Bank

You might have read that in the last year Canadian Pacific Railway sold its subsidiary, the Delaware and Hudson Line (D &H) to Norfolk Southern. I surmise, for most, this tidbit of news was glanced over and met with nary a second thought. Well, in my household the sale caused great sadness and, yes, a few tears.

You see, I am the father of two young boys who love everything train related. Thanks to Thomas the Train and some overly generous grandparents, aunts, uncles, and cousins, my house is littered with train toys. Thomas, Chuggington, Lionel…we have them all. A large train table even sits in my dining room taking up so much space that I can barely reach the kitchen.

For the last decade or so, Canadian Pacific Railway has run an annual Christmas train across Canada and the northern tier of Pennsylvania and New York. The train is a delight. It is illuminated with thousands of bright lights and Santa Claus sits atop riding the steel behemoth. Each year, my family treks out into the cold to watch the train whizz by. We have waited in freezing rain, snow, and ice, but have never been disappointed. The last running of the train we only caught the tail end of the show. I did not want to stand outside for an hour, so we got to our favorite spot a bit late. I recall saying not to worry and that we will see it all next year for sure. Well…….there will be no next year. The sale of the railway by Canadian Pacific Railway to Norfolk Southern means no more Christmas train.

Procrastination, the art of putting matters aside for a while, is so easy. Why do something now, when it can be done later? Well, not to sound overly fatalistic, but there may be no later. The Christmas train might not run next year. Things need to get done. As the end of the year approaches, it is time to get off of the couch, roll up the sleeves, and get to work putting our financial and estate house in order.

First, the tax year ends on December 31st, so it is time to take advantage of some tax planning opportunities before time runs out. The following is just a sampling of year-end tax plays: (1) generate a last minute tax deduction by making a gift to your favorite charity; (2) tax loss harvesting which is the selling of investments in taxable accounts that are trading at a loss, in order to offset any taxable gains that may have also been incurred during the year; and (3) contribute as much as possible to your retirement accounts during the year. Traditional 401(k)s and IRAs (not Roth) take earnings before income taxes and places those earnings into a retirement account. Since the money is contributed to the retirement account before taxes, your overall income for the year will be reduced, resulting in a lower income tax bill.

Next, sit down and complete your estate plan. It is a misnomer that estate documents are only for the ultra- wealthy. Everybody needs a Last Will and Testament and Powers of Attorney. Without a Last Will and Testament, the state and its courts will decide which heirs of your estate will receive what property - regardless of your wishes. A Last Will and Testament provides the opportunity for you to decide what is best for your estate, including who should take care of your minor children, what specific property should your heirs receive, and who is the best person to act as your estate’s administrator/ executor.

An estate plan is not just a Last Will and Testament. It should also include Powers of Attorney for both Health Care and Financial Matters. Powers of Attorney are legal documents appointing an agent to assist you in handling both your health and financial matters during your life for convenience purposes or in the event you become disabled. For instance, if something catastrophic happens to you like a stroke or car accident without proper Powers of Attorney, no person, even your spouse, will be able to act on your behalf (pay bills, speak to a credit card company, speak to Social Security or other governmental agencies) or talk to your health care providers without lengthy and costly court proceedings to appoint a guardian.

Be it a new child, loss of a job or a windfall, the circumstances of life are always changing. People often forget to make updates to their financial or insurance plan as life evolves. This is the time of year to do such things and start next year off with a bang. For example, if work has been kind to you, consider increasing your contributions to your retirement accounts. Retirement contributions provide excellent tax deferment and investment growth benefits. Or, if you have added members to your family during the year, revisit the amount of your life insurance to make sure your family is adequately covered in the event of a catastrophic event. On the health insurance side, contemplate whether your current plan is right for you, and make sure you take advantage of any special annual benefits your plan offers. I know that some plans offer annual gym discounts, free exams, or teeth cleanings. If you don’t use these perks, you lose them as they do not roll over into the next year.

In the midst of your holiday cheer, please take a few moments to quickly review your current situation. Don’t procrastinate like myself in the Christmas train debacle. Perhaps, schedule a year-end meeting with one of the many great local advisers here in Northeastern Pennsylvania, because, as I like to say, “Local advice is often the best advice.”
From myself and The Honesdale National Bank, please have a safe and joyous Holiday Season!

The Honesdale National Bank and its employees do not render legal, tax, or accounting advice. Accordingly, you and your attorneys and accountants are ultimately responsible for determining the legal, tax, and accounting consequences of any suggestions offered herein. Furthermore, all decisions regarding financial, tax, and estate planning will ultimately rest with you and your legal, tax, and accounting advisors. Any description pertaining to federal taxation contained herein is not intended or written to be used, and cannot be used by you or any other person, for the purpose of avoiding any penalties that may be imposed by the Internal Revenue Code. This disclosure is made in accordance with the rules of Treasury Department Circular 230 governing standards of practice before the Internal Revenue Service.