Begley Law Group Year End Planning Guide

Adam Cohen, Esq.

As the end of the year approaches, individuals often have many things on their minds, least of which is estate planning. While there is not much time left in 2023 to complete a comprehensive plan, there are a number of steps individuals can take to boost the estate plans they have in place. The following is a list of simple and effective strategies individuals can employ to maximize planning before 2023 ends:

• Make annual exclusion gifts of $17,000 ($34,000 for married couples). Whether outright or to trusts for family members.
• Maximize contributions to retirement accounts.
• Create and fund- or even “superfund” with $85,000- a 529 college savings plan for children or grandchildren.
• If higher income is expected in 2024, consider accelerating taxable income this year by preemptively realizing capital gains, taking retirement plan distributions, or completing Roth conversions.
• Seek to offset capital gains by realizing capital losses.
• Make sure all inherited IRA Required Minimum Distributions (RMDs) are taken by December 31, 2023, to avoid penalties.
• Ensure intended charitable gifts are completed.
• Ensure trusts or other planning vehicles are appropriately funded.
• Review essential estate planning documents like Wills, Trusts, and Powers of Attorney to make sure they still suit your needs.
• Confirm beneficiary designations on all retirement accounts, life insurance policies, annuities, and transfer-on-death accounts.

These and other planning tactics should be employed in consultation with a financial advisor, lawyer, and accountant.

In addition to these simple steps, sophisticated individuals will likely want to revisit their entire estate plan in light of the historically high Estate and Gift Tax Exemptions which are set to end at the conclusion of 2025. This reduction in tax exemption puts even middle-class individuals’ estates in the crosshairs of federal tax liability. However, a variety of planning strategies can still be employed to protect and preserve legacies from federal taxation. The next two years provide ample time for clients to plan around a changing tax regime.