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Estate planning checklist for the new year

On Behalf of | Jan 14, 2022 | Trusts And Estates |

New Year’s resolutions are an annual rite for many. Often these will include financial goals on being smarter about money. For many, this involves budgets and saving money, but it can also include creating or updating an estate plan. The death of any resolution is often an unrealistic goal, so here is a checklist of some achievable ones in 2022.

Carefully respond to policy changes

Amidst the economic growth after the Great Recession and fear of political uncertainty going into Obama’s reelection, some were aggressive in gifting tax-free to irrevocable trusts that they could not access. Today’s political and economic climate is more uncertain than ever, so maintaining control over assets can provide greater peace of mind in the present as well as the future. There are many options for doing this. As always, it is also wise to monitor all estate planning changes made by the current administration.

Review appreciated assets

It may be useful to swap appreciated assets for equal cash put back into the trust. If it is a grantor trust, this is one way to reduce the income tax obligations on those assets.

Consolidate in a secure location

Finished documents must be protected yet accessible by the right people. This meant hard copies in a safe or environmentally secure location in the old days. These days it also likely means a secure online platform with passwords similarly protected. Make sure that at least one advisor or beneficiary also has this information.

Adjust to life’s changes

It is wise to occasionally evaluate circumstances to make sure estate plans still address all wishes and goals. For example, perhaps a trustee is getting older or unreliable because of health. There may have been a death, divorce, marriage, or birth in the family.

Charitable giving choices

Depending upon when the plan was last updated, there may need to be charitable giving changes that maximize tax benefits. Of course, there may be other reasons that better reflect current interests, values or need.

Involve heirs and advisors

There are still many who choose not to discuss financial matters or estate planning with family members or beneficiaries. Their concerns are valid, but working with an advisor and sharing information with heirs can avoid more significant problems down the line. It can be a kindness of letting them know what to expect, or clarifying one’s broader intentions, so survivors do not have to guess (and argue) over what the intentions were.