Bay Area Estate And Tax Planning Law Firm

Discussing estate planning over the holidays

On Behalf of | Nov 27, 2023 | Estate Planning, Trusts, Wills |

Holiday family gatherings in California present a good opportunity to talk to your loved ones about your estate plan. As everyone catches up on each other’s lives, you can consider how to make arrangements that protect assets within the family, manage taxes or support causes important to you.

Think about updating your plan

Setting up an estate plan gives you peace of mind, but these plans have a way of getting out of date. If you are a parent, you may need to change how your plan covers your children as they approach adulthood and beyond. You may find it appropriate to name adult children as co-trustees of their trusts now that they are no longer minors.

Over time, one or more people named in your will or trust may have passed away. Whether the person you lost was a beneficiary, trustee or executor, you should update your plans to reflect the death.

Explore tax advantages

Depending on your tax obligations, the end of the year could be a good time to give cash gifts. For 2023, you may grant up to $17,000 in a year without imposing any income tax requirements. This does not have to be a direct cash gift. You can invest it for someone for later use.

Older individuals may also want to evaluate their tax situation. When required minimum distributions (RMD) from retirement accounts start and you do not need the money for personal expenses, you could investigate qualified charitable distributions. You can send the RMD to a charity and prevent that money from becoming your taxable income.

Talk about family heirlooms

When everyone is together for the holidays, you could ask who would like to receive your family heirlooms. Someone might really treasure an item whereas another relative has little interest in it. Knowing who sincerely wants what would allow you to provide specific instructions that ensure the transfer of your sentimental possessions.