Year-End Financial Planning Checklist for Your Estate: Maximizing Deductions and Reducing Liabilities

As the year comes to a close, it’s an ideal time to review your estate plan to maximize tax efficiency and ensure that your financial goals are on track. From making strategic gifts to planning for retirement and education funding, these year-end actions can help you protect and grow your wealth for generations to come. Here’s a checklist to guide you through a productive year-end financial review with your estate planning team.

1. Plan Gifts with an Eye on Tax Efficiency

One of the simplest and most effective strategies for reducing estate taxes is through annual gifting. The IRS allows individuals to gift up to a certain amount per recipient each year without incurring gift tax. Meeting with your estate planning attorney before year-end can help you make the most of this annual exclusion. They’ll guide you on structuring gifts to loved ones, friends, or even charitable organizations, helping you reduce the taxable portion of your estate while benefiting those you care about.

2. Collaborate with a CPA for Tax-Saving Opportunities

If you own a closely-held business, consider meeting with a CPA to discuss any year-end tax elections or planning opportunities available to you. Your CPA can guide you through decisions like bonus depreciation, equipment deductions, or qualified business income (QBI) deductions that could positively impact both your personal and business taxes. Working together with your CPA and estate planning attorney can provide a comprehensive strategy to balance short-term tax savings with long-term estate planning goals.

3. Review Retirement Accounts for Strategic Contributions or Distributions

Year-end is a perfect time to assess your retirement accounts, including IRAs, 401(k)s, and pensions, with the help of your financial advisor. If you’re over 73, remember to take any required minimum distributions (RMDs) to avoid tax penalties. Alternatively, if you’re still building your retirement savings, maximizing contributions now can enhance your long-term financial security while providing tax benefits. Your advisor can also help assess the viability of Roth conversions or charitable rollovers if they align with your estate and income strategies.

4. Plan for Future Education and Large Expenses

If part of your estate plan includes providing for your children’s education or other large future expenses, year-end is an excellent time to evaluate and optimize funding strategies. Your financial advisor can help you explore tax-advantaged options like 529 plans or custodial accounts, ensuring your contributions align with both your estate and income planning goals. Additionally, if you anticipate major expenses, such as a wedding or home purchase for a child, your advisor can recommend investment vehicles or structured gifts to prepare financially.

5. Check Property Titling and Trust Funding

Make sure that any real estate, business interests, or other significant assets are properly titled and funded into your trust, if applicable. This ensures that your estate plan will function as intended, avoiding unnecessary probate and streamlining the transition of assets. Year-end is an ideal time to review any recent purchases or changes in your holdings with your estate planning attorney to confirm that all titles, deeds, and designations are up to date.

6. Review Your Estate Plan with Your Advisory Team

As part of your year-end review, consider setting up a meeting with your estate planning attorney, CPA, and financial advisor to discuss your goals for the coming year. Having all your advisors in sync can help identify additional opportunities to protect your wealth, reduce liabilities, and optimize tax savings. This proactive approach ensures your plan is as robust and effective as possible, aligning with any recent changes in tax laws or financial circumstances.

Taking Charge of Your Financial Future

By approaching your estate plan with this year-end checklist, you create an opportunity to protect your legacy and make smart financial choices for yourself and your family. From making tax-efficient gifts to preparing for retirement and education, each step strengthens your estate plan, helping you enter the new year with confidence and peace of mind.

What You Need to Know About the Corporate Transparency Act

The Corporate Transparency Act (CTA) is a new federal law aimed at combating financial crimes such as money laundering and fraud by requiring certain businesses to disclose information about their owners. This law affects small businesses, corporations, and limited liability companies (LLCs), making it crucial for business owners to understand its requirements.

Who Needs to Report? Any corporation, LLC, or similar entity registered in the U.S. must report its "beneficial owners" unless it qualifies for an exemption. A beneficial owner is anyone who exercises substantial control over the company or owns at least 25% of its interests.

Certain entities, like large corporations with over 20 full-time employees and more than $5 million in gross revenue, or entities already subject to other federal reporting, are exempt. However, most small and family-owned businesses will need to comply.

When is the Deadline? The initial deadline to report under the CTA is January 1, 2025. Any entity created or registered before January 1, 2024, must file its report by this date. For businesses formed after this date, the report is due within 30 days of registration.

What Needs to Be Reported? Entities must disclose information about each beneficial owner, including:

• Full legal name

• Date of birth

• Residential or business address

• A unique identifying number from an acceptable ID (such as a passport or driver’s license)

The report is filed with the Financial Crimes Enforcement Network (FinCEN), and failure to comply can result in significant penalties, including fines or even criminal charges.

If you are a small business owner with concerns about how the Corporate Transparency Act affects your estate plan or business structure, our estate planning law firm is here to guide you through the process. Reach out to us for for a referral to our network of compliance advisors and to ensure you stay compliant while safeguarding your business and family’s future.