2023 YEAR END CHECKLIST FOR ESTATE PLANNING
Use this 2023 year-end checklist for estate planning as 2023 ends and you start ringing in 2024. This is a wonderful time of year for celebration with your friends and family, but year-end planning should be completed too. Be sure to use your snow days; or your vacation days; or your down time to address these action items on your year-end checklist for estate planning.
Charitable Gifts & Giving Tuesday
Your year-end checklist should include charitable gifts on Giving Tuesday and/or charitable gifts as holiday gifts in honor of loved ones. At year end people give gifts of charitable donations to a qualifying charity because they are motivated to give back to their community and they are motivated by the opportunity to obtain a deduction from their taxable income. Pursuant to Internal Revenue Code §501(c)(3), a qualifying charity is a nonprofit organization which is set up exclusively for charitable, educational, religious or scientific purposes.
As an estate planning attorney, I assist clients who want to leave a legacy by gifting money to charities through their will and/or trust. However, I believe that it is also important to remember to give back and support your community during your lifetime. Giving Tuesday serves as a reminder of how we can all come together to give back in a variety of ways to better our community.
Giving Tuesday has become a global movement that encourages people to spread generosity through philanthropy. Giving Tuesday takes place every year on the Tuesday following Thanksgiving and Cyber Monday. Many organizations, companies, non-profits, and individuals donate money to participate.
John Williamson, the Executive Director for Amador Community Foundation, reports that on November 28, 2023, our community responded in a big way to Giving Tuesday. Amador Community Foundation, which is our local qualifying charity with a mission to connect local generosity with local needs raised donations in the amount of $645,186.99 benefiting 64 local charities. To give locally you can go to their website: amadorcommunityfoundation.org
Some people give charitable donations as holiday gifts. This allows them to honor a loved one. Whether you made a charitable gift on Giving Tuesday or charitable gifts as holiday gifts in honor of loved ones, you’ll want to retain your gift receipt, so you are ready to report at tax time.
Annual Gifts
Your year-end checklist should include family gifting before year-end to a family member, friend, or neighbor in need. This annual gift does not result in a deduction from taxable income for gifting. But if the gift is under $17,000 ($34,000 for married couples), it won’t be subject to gift tax and doesn’t count toward your lifetime gift and estate tax limit. You’ll want to consult with your financial advisor and your tax advisor to determine if you should consider family gifting before year-end. This gift amount will increase to $18,000 for gifts made in 2024.
Estate Planning Review
Your year-end checklist should include a look at your estate planning to ensure that your overall estate plan is current. The documents required for a comprehensive estate plan include the Trust; a Last Will & Testament – Pourover Will; a Healthcare Directive, and a Power of Attorney. It is important to check first to make sure that all documents have been properly executed and notarized and that there are no missing pages. It is important to determine if any changes need to be made to the original documents. Common examples include legal name changes and changes to marital status. It is important to determine if any updates need to be made due to change in circumstances. Common examples include change in property ownership because of purchase and/or sale and/or receipt of an inheritance.
Double Check Your Designated Beneficiaries
Your year-end checklist should include review of your designated beneficiaries. When you apply for a life insurance policy or when you establish a 401(k), IRA, and some non-retirement accounts, you will be asked to name one or more beneficiaries. A beneficiary is the legal name of the person or persons you want to inherit the proceeds from your accounts or policies after you die. Designated Beneficiary forms do supersede wills and trusts. Failing to update your designated beneficiaries is a common and expensive mistake because probate can be triggered for the accounts or policies after you die or the person named may no longer be the person you intended to receive the gift. This is common following a divorce when a person intended to remove an ex-spouse but they fail to update their designated beneficiary.
Insurance Policies
Your year-end checklist should include review of your home, auto and life insurance policies to determine if you have enough coverage or if deductibles need to be adjusted.
Passwords/Apple ID
Your year-end checklist should include a review of your password list and a review of your legacy contact in Apple ID. To avoid a probate of your apple ID, make sure that you add one or more Legacy Contacts in Apple ID settings on your iPhone, iPad, iPod touch, or Mac. If the executor of a deceased user’s estate wishes to gain access to the deceased user’s stored content, the executor must now obtain a court order “That Apple is ordered by the court to assist in the provision of access to the decedent’s information from the deceased person's accounts.” For your legacy contact to gain access they need an Apple generated access key and a death certificate. You can keep a copy of your legacy contact’s access key with your estate planning documents.
