Your End Of The Year To-Do List For Estate Planning

2021 is a year that many of us will be happy to put behind us, but there are a few things you should be sure to cross off your to-do list before turning the calendar to January. One of them is checking in with your estate planning attorney

At Palmer & Slay, we work with our clients in the Brandon, Mississippi area to make sure they have maximized their tax savings by making gifts to loved ones and charitable organizations before the end of the year. We also assist clients who need to update their estate plans because the past year involved the birth, death, marriage, or divorce of a loved one. 

End Of The Year Gifting

Most people are aware that it is important to make charitable gifts before the end of the calendar year if they want to maximize their income tax savings. Just as important, but less well-known, is the importance of making gifts to loved ones by the end of the year in order to maximize estate tax savings. 

The annual gift tax exclusion allows an individual to pass up to $15,000 per person, to as many individuals as one would like each year, tax-free. That amount will increase to $16,000 in 2022, but that is no reason to wait to make a gift since the gift tax exclusion is available each year. It is also important to note that married couples can gift jointly, and pass $30,000/per year/per person in 2021, and $32,000/per year/per person in 2022. 

Historically, the gift tax exclusion has been an important way for wealthy families to pass assets on to their loved ones. This is perhaps less of a concern right now since the federal estate tax does not kick in unless your estate is valued at $11.7 million, or $23.4 million if you are married. However, estate tax laws are always in flux. So, if you have the ability to make gifts each year, it is prudent to do so as insurance against unfavorable future laws. 

If you are worried about what might happen if you give certain family members $15,000 every year for the next few years, or you would like to gift to a minor, Palmer & Slay can help you set up a trust to hold your gifts. The money will no longer be yours, so you won’t be taxed on it, but we can craft a trust that limits your loved one’s access to the trust corpus. We can even set it up so funds can only be distributed for specific purposes, or if certain conditions are met. 

Updating Your Estate Plans 

If someone in your family has given birth, passed away, tied the knot, or gotten divorced since the last time your estate plan was updated, now is the time to meet with the Palmer & Slay team to ensure that your plan still meets your family’s needs. A quick appointment is usually all that is necessary to make minor changes to an estate plan. 

Preserving Your Wealth. Protecting Your Loved Ones. 

The Palmer & Slay team is counting down the days until 2022, and we are eager to help our clients enter the new year in good form. If you have estate planning issues you want to address before the end of the year, please contact our office as soon as possible to schedule an appointment.