If you have been putting off your estate planning, don’t worry, you’re still alive! But… no one lives forever so let’s recognize it as a great opportunity to start thinking about estate planning in 2020. Your loved ones, family members and others will thank you.
According to AARP, 60% of American adults do not have any form of estate plan-will, a living trust, or otherwise. Don’t be one of those people! I could explain a lot of reasons why. Suffice it to say, having an estate plan can save your loved ones time and money, and the options as far as estate planning are concerned are incredibly flexible. They can be as simple as a short will or as complex as an irrevocable life insurance trust. It depends on your current situation and your goals.
With the end of the year fast approaching, some things to keep in mind and ideas to consider:
1. Take advantage of the annual exclusion gifts and lifetime exemption. In 2019, the federal gift exemption is $15,000 in cash or property. Married couples may double that exclusion, giving up to $30,000 to any one person. This is an easy way to reduce your estate for tax purposes and get some enjoyment out of lifetime gifts to family and friends.
2. Donor Advised Fund. Depending on your income tax bracket, consider a Charitable Donor-Advised Fund for your charitable donations. Doing so may allow you to take advantage of higher charitable donation deductions imposed by last year’s tax amendments.
3. Tax advantaged accounts. To the extent able, consider taking full advantage of the employer sponsored 401ks, IRAs, Health Savings Accounts, and 529 Education Plans. Doing so generally allows those assets to grow tax free, allowing for greater returns over a period of time. Those dollars are limited annually, so if you have not maximized those this year, consider doing so because you can start fresh next year.
4. Review that estate plan! Finally, if you have not done so recently, consider reviewing your current estate plan (if any) with your estate planning attorney and financial advisor. The laws are constantly changing in this area and periodic review of those estate plans is good idea to make sure you are capitalizing on those benefits that you can.
Every year, folks set goals for the New Year. Do yourself and your loved ones a favor and take time to review that estate plan. They’ll appreciate it!