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As the end of the year approaches, it’s a great time to review your estate planning documents and tax strategies. This annual check-in is crucial to ensure that your assets are protected, and your wishes will be carried out in case of incapacity or death.

Here are some key items to consider as part of your year-end checklist for estate planning, trusts, and taxes.

Review Your Estate Planning Documents

Your estate planning documents are the foundation of your overall plan. These may include:

  • A will: this document directs how your assets will be distributed after your death. It’s important to review and update your will periodically, especially if there have been any major life changes such as marriage, divorce, or the birth of children.
  • Trusts: trusts can provide a variety of benefits in terms of asset protection and minimizing estate taxes. If you have a trust established, review it to ensure that it still aligns with your goals and wishes.
  • Power of Attorney: this document designates someone to make financial decisions on your behalf in case you become incapacitated. It’s important to review and update this as needed.
  • Healthcare directives: these documents outline your wishes for medical treatment if you are unable to communicate them yourself. Reviewing and updating these periodically is crucial to ensure your wishes are still accurately reflected.

Take a close look at each document to ensure they accurately reflect your current wishes and circumstances.

Update Your Trust

A trust can be an essential part of your estate plan, providing a measure of control over how and when your assets are distributed. At the end of the year, it’s advisable to review your trust to make sure it aligns with your current goals.

Consider the following factors:

  • Beneficiaries: have there been any changes in who you wish to be your beneficiaries? If so, be sure to update your trust accordingly.
  • Trustees: you may have appointed a trustee to manage the assets in your trust. Make sure they are still able and willing to fulfill this role.
  • Assets: have you acquired new assets or sold existing ones? Be sure that all of your trust assets are accurately titled and managed accordingly.
  • Distribution provisions: review the terms of your trust to ensure that they still reflect your wishes for how and when your assets will be distributed to your beneficiaries.

Changing circumstances—like marriage, divorce, births, deaths, or substantial changes in net worth— may also necessitate an update to your trust.

Review Your Retirement Accounts

Retirement accounts, such as IRAs and 401(k)s, can be an important part of your overall financial plan. As the year comes to a close, review your contributions and consider making any necessary adjustments. You should review your designated beneficiaries for these accounts and, if necessary, make updates.

Plan for Taxes

Year-end is also a good time to review your tax strategies as part of your overall estate plan.

Consider these steps:

  • Consult with an accountant or financial advisor to identify any potential tax-saving opportunities.
  • Maximize contributions to your retirement accounts, if possible, to reduce taxable income.
  • Make charitable contributions before the end of the year for potential tax deductions.
  • Consider gifting assets to family members or loved ones as a way to minimize estate taxes and potentially qualify for the annual gift tax exclusion.

Remember, tax laws can change from year to year, so it’s important to stay informed and adapt your strategies accordingly.

Reflect on Your Goals

As you review your estate plan, trust, and tax strategies, take a moment to reflect on your overall goals and wishes. Have they changed since last year? Are there any new considerations or factors that may impact your plan?

It’s a good idea to have open and honest conversations with your loved ones about your estate plan and wishes. This can help avoid any confusion or disagreements in the future. Consider discussing important decisions related to your assets, healthcare, and end-of-life care with them. You may also want to review who you’ve named as beneficiaries, executors, trustees, and agents in your estate planning documents. If any changes need to be made, this is the perfect time to do so.

Plan Ahead for the New Year

Finally, as you wrap up your year-end checklist, start planning ahead for the new year. Consider setting goals for yourself and your estate plan, such as creating a trust or updating your will. It’s a great time to schedule regular check-ins throughout the year to ensure your plan remains up-to-date and aligned with your wishes.

By taking the time to review and update your estate plan, trust, and tax strategies at the end of each year, you can have peace of mind knowing that your assets will be protected, and your legacy preserved.

How Members Trust Company can help you plan ahead

Members Trust Company (MTC) offers a range of financial services and has the expertise to help you along your wealth management journey. As a leading wealth management provider, MTC manages assets, preserves family harmony, and makes crucial financial decisions for the clients they serve. MTC adheres to the fiduciary standard, a legal duty to act in the best interest of clients. This commitment to transparency, integrity, and prudence provides clients with peace of mind, knowing that their financial matters will be handled with care. Contact us today to learn more about how we can assist you with your estate planning and investment needs.

Non-deposit investment products available through Members Trust Company are not deposits of or guaranteed by the trust company, a credit union or credit union affiliate, are not insured or guaranteed by the NCUA, FDIC or any other governmental agency and are subject to investment risks including possible loss of the principal amount invested. Members Trust Company, owned and managed by America’s credit unions, is a special purpose federal thrift regulated by the Office of the Comptroller of the Currency. Past performance is not indicative of future results. This is for informational purposes only and is not intended to provide legal or tax advice regarding your situation. For legal or tax advice, please consult your attorney and/or accountant. Any opinions expressed are those of the presenter and do not necessarily reflect the position of Members Trust Company. The information above is obtained or compiled from sources we believe to be reliable. We Do Not Guarantee that such information, will be free from errors, omissions, whether human or mechanical, nor do we guarantee their timeliness, accuracy, or completeness.