As the year draws to a close, it’s the perfect time to review your estate plan and ensure it’s still aligned with your goals and the latest tax laws. Proactive steps now can help minimize tax liabilities, maximize gifting opportunities, and set the stage for a smooth transition for your assets. At Axis Estate Planning, we are here to guide you through these critical end-of-year tasks. Here are a few essential estate planning actions to consider before the new year:
1. Review Your Estate Plan
Life changes quickly, and your estate plan should keep pace. Take time to review your will, trusts, and other documents to ensure they reflect your current wishes and family circumstances. This is especially important if you’ve experienced major changes this year, such as the birth of a child or grandchild, a marriage, a divorce, or the passing of a loved one. Confirm that your named executors, trustees, and agents under powers of attorney are still appropriate for their roles.
2. Optimize IRA Distributions
If you’re required to take minimum distributions (RMDs) from a retirement account like an IRA, be sure to do so before the end of the year to avoid penalties. Even if you’re not required, consider whether making strategic withdrawals now could lower your taxable income in future years.
For those feeling charitable, a Qualified Charitable Distribution (QCD) from an IRA can satisfy RMD requirements while benefiting a cause close to your heart. Ensure this is done correctly and within the required timeframe by consulting with an estate planning attorney at Axis Estate Planning.
3. Take Advantage of Year-End Gifting
The annual gift tax exclusion allows you to gift up to $18,000 per recipient in 2024 without impacting your lifetime estate tax exemption. Making gifts before December 31st can reduce the size of your taxable estate while sharing your wealth with loved ones or supporting your favorite charities.
However, gifting can sometimes affect benefits eligibility, such as Medicaid. Our experienced attorneys can help you navigate the complexities of gifting to ensure it aligns with your overall estate plan.
4. Update Beneficiary Information
Beneficiary designations on retirement accounts, life insurance policies, and other financial instruments often take precedence over what’s written in your will or trust. Review these designations to ensure they reflect your current intentions.
Additionally, verify that all contact information—addresses, phone numbers, and emails—for heirs and key advisors is up to date. This avoids administrative headaches and ensures a smooth process for your loved ones.
Estate planning is not a “set it and forget it” process. Regular updates, especially at critical moments like year-end, ensure your plan is optimized to protect your legacy and minimize tax exposure. By taking these steps now, you can move into the new year with confidence, knowing your estate plan is working as hard as you do.
For assistance with your end-of-year estate planning, contact Axis Estate Planning at (248) 920-9398 or visit www.axisattorneys.com. Let us help you protect your legacy and plan for the future.
