End-of-Year Estate Planning Checklist
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. Here are a couple of 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. Be sure to check with your estate planning attorney to ensure this is done in the proper manner and timeframe.
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. Again, be sure to check with a qualified estate planning attorney prior to gifting, to see if other interests are affected or impacted by the gift. For example, even though gifting is allowed for estate tax purposes, it may negatively impact your – or your beneficiary’s – eligibility for benefits such as Medicaid.
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. Similarly, verify that all contact information—addresses, phone numbers, and emails—for heirs and key advisors is up to date to avoid administrative headaches later.
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.
