End-of-Year Estate Planning Checklist
As the end of the year approaches, review this checklist of estate planning actions.
- Review your current wills and trusts. Wills and trusts may need to be updated because of frequent tax law changes to the federal estate tax exemption amount. If estate tax planning is not a factor for you now, make sure your executor and trustee designations are accurate.
- Inventory and make a written record of the contents of any safe-deposit box. Give a copy to a trusted family member and remove any property that does not belong to you.
- Review and update beneficiaries of your life insurance policies and retirement plan assets. Also review contingent (backup) designations and settlement provisions. If you have a taxable estate, consider shifting ownership of your life insurance to an irrevocable trust to your heirs.
- Name designated heirs to receive bank account proceeds at your death. Naming heirs as “joint owners” is generally too risky and may create gift tax issues. Instead, consider using a “payable on death” (POD) designation to redirect an account. This method is less complicated, but it still does not solve tax problems and is only advisable in cases where estates are worth less than $2 million.
- Make sure your durable power of attorney for health care and living will are current. Are your updated documents on file with family members and health care providers? Have decisions on anatomical gifts been discussed with your family?
- Review and revise existing buy-sell agreements. Prepare agreements if there are none, and value purchase price clauses under those agreements that require periodic review. Buy-sell agreements are critical to preserve the value of the family business.
- Finish charitable contributions before December 31. As you think about special holiday gifts for family and friends, remember that making year-end charitable gifts can be an extraordinary and heartwarming experience. Regardless of the gift arrangements you choose, your generosity carries many rewards.
Under the Pension Protection Act of 2006, you are allowed to transfer funds directly from your IRA to qualified public charities if you are age 70 or older. Be sure to complete the transfer (up to $100,000) before December 31st. You will not have to include the amount transferred to your public charity as a taxable income, nor can you take it as a charitable deduction.
We Can Help...
If you’re still in the planning stages, please ask the Tolfree Foundation for help. Be prepared to confidentially address financial and personal goals with regard to your charitable giving interests, what you want to give, and the timing in regards to when your gift will be made. We appreciate your support, so we will do all we can to assist you in return.
For further information, call 989.343.3690 or e-mail bbernard@tolfreefoundation.org
