As the end of the year approaches, it’s a perfect opportunity to review your estate plan. This essential task ensures your financial and personal affairs are in order and reflects changes in your life, assets, or goals. Here are key considerations to guide your year-end planning:
Review and Update Key Documents
Life changes—such as a marriage, divorce, birth, or death—can affect your estate plan. Year-end estate planning ensures your will, trusts, and other legal documents reflect your current wishes. Confirm that named executors, guardians, and trustees remain appropriate choices for your circumstances.
Beneficiary Designations
Accounts like retirement funds, insurance policies, and investment accounts often bypass wills and go directly to named beneficiaries. Verify that these designations align with your intentions, especially after major life events.
Address Tax Considerations
Year-end is an excellent time to explore strategies for minimizing taxes. Gifting assets to loved ones, taking advantage of annual gift tax exclusions, or making charitable donations can reduce your taxable estate. Additionally, consider whether upcoming changes in tax laws, such as adjustments to federal estate tax exemptions, might impact your plan.
Reassess Property Ownership and Titles
Ensure that property titles align with your estate planning goals. For example, joint ownership structures or transfers to trusts may offer smoother transitions for your heirs and reduce complications like probate.
Healthcare Directives and Powers of Attorney
Update your healthcare directive and durable power of attorney. These documents authorize trusted individuals to make medical or financial decisions on your behalf if you become incapacitated. Verify that their contact information is current.
Plan for Digital Assets
With the increasing prevalence of online accounts, digital assets deserve special attention. Create a comprehensive inventory of your digital property—such as social media accounts, online banking credentials, or cryptocurrency wallets—and ensure that your executor or loved ones can access them if needed.
Maximize Wealth Transfer Opportunities
For families, year-end can also be a strategic time to transfer wealth. Using irrevocable trusts or other tools can shield assets from taxes and ensure they’re distributed according to your wishes.
Consult with Professionals
Estate laws and tax regulations are complex and often subject to change. Working with an estate planning attorney or financial advisor ensures your plan is compliant, optimized, and tailored to your unique needs.
Why Do Year-End Estate Planning Now?
By addressing these areas before 2025 and doing your year-end estate planning, you can start the new year with peace of mind, knowing your legacy is secure. Proactive estate planning saves your loved ones unnecessary stress and expenses and ensures your assets are managed and distributed according to your wishes.
Take charge of your future today—reach out to an experienced estate planning attorney to get started or to review your current estate plan.
