In August 2018, Aretha Franklin passed away, leaving four children and an estate in the tens of millions of dollars. She did not, however, leave a last will and testament. This lack of planning has created the potential for legal conflict over settlement of her sizeable estate.

The passage of the Tax Cuts and Jobs Act (TCJA) on December 22, 2017, brought significant and abrupt changes to the tax code. The broad impact of these changes has yet to be fully realized, but it’s likely that just about everyone will be affected come tax season. As you work to help your clients pursue their financial aspirations, keeping a focus on managing your clients’ tax liability is essential. An understanding of the following four changes under the TCJA, as well as the opportunities they present, can help keep your clients’ planning strategies on track.

A power of attorney (POA) is a document that designates an agent or attorney-in-fact to act on your client’s behalf regarding his or her financial affairs. Without a valid financial POA, a person’s loved ones would need to seek court approval for the authority to make any decisions involving the accounts. Although it seems like an obvious solution, there are both pros and cons to the POA decision, and it’s your job, as the trusted financial advisor, to help your clients determine the best solution for them.

Establishing an irrevocable Medicaid trust can help protect assets from liquidation when the need for an extended nursing home stay arises. When this strategy works, a loved one’s admission to a long-term care facility does not result in a substantial spend-down of investments, and wealth can be preserved and transferred to the next generation. But a strategy involving placing assets into an irrevocable arrangement should not be entered into lightly, especially if there are viable alternative protection strategies available.