Financial steps to consider taking before the end of the year:
REVIEW YOUR ESTATE PLAN
Regularly reviewing your estate plan is crucial to ensuring that it continues to reflect your wishes. Changes to your personal circumstances (life events, finances, etc.) as well as changing legal requirements, estate regulations, and updates to our tax laws can impact your estate. In addition, life events such as marriage, divorce, the birth of children, or the acquisition of new assets may necessitate updates to beneficiaries, guardians, or the distribution of wealth. Regular reviews with your estate planner, financial advisor, and tax advisor can help avoid unintended consequences and ensure your plan continues to align with your current priorities and minimize complications for your heirs.
REVIEW YOUR FINANCIAL PLAN
When was the last time you reviewed your financial plan? Financial plans are living documents and need to be kept up to date to provide continued value. For our clients in or nearing retirement, we generally recommend working with your advisor to update your plan on a biennial basis, or when major life events occur that may affect the plan (i.e. kids, grandkids, house purchases, income changes, a death in the family, marital changes, etc.). For our clients who are further from retirement, we may recommend more frequent reviews. Please take a moment to reflect on the past year and let your advisor know of any impactful life events or deviations from your plan that may impact your ability to meet your long-term goals.
CONSIDER YEAR-END TAX PLANNING & GIFTING STRATEGIES
We have discussed year-end tax planning strategies on a few different occasions recently, including our annual Year-End Tax Update and within our October Q&A. If you have not already done so, we recommend reviewing our most recent Q&A as well as the video or transcript from our tax update call.
In addition to focusing on your year-end tax liability, gifting strategies can be beneficial in reducing your taxable estate. By making these annual gifts, you effectively transfer wealth out of your estate, potentially lowering its value and reducing the estate taxes your heirs may face upon your death. This strategy allows you to gradually shift assets to your loved ones while retaining control over larger portions of your estate. In addition, focusing on a charitable gifting strategy in the near-term allows you to witness your legacy take hold in addition to potentially reducing your tax liability while the strategy is in place.
CONCLUSION
As every situation is different, we recommend maintaining communication with your financial, tax, and estate planning advisors throughout the year; but especially towards the end of the year as the tax year comes to an end. Please let your Wealth Management Advisor know if you have any questions or would like to schedule a meeting to review your financial situation.
Written: November 30, 2024