End Of Year Housekeeping Ideas For Every Estate

The end of the year is rapidly approaching which means most people are focused on what to give (or get) for Christmas and setting plans for the new year. However, there are some steps that should be taken to make sure a person’s estate is up to date and able to take maximum advantage of tax and other savings that are available. Here are a few highlights to keep in mind from a wonderful article:

• If you are considering giving gifts to a friend or family member, be sure to make the gift this year if you are still under the yearly gift exclusion of $14,000 for that person. This is a use or it lose exclusion so if you anticipate a gift in excess of $14,000 next year it would be wise to make part of that gift now to avoid negative tax implications.
• While this is not a time limited exclusion, the direct payment of education and medical expenses will avoid any tax implications and provide a very merry Christmas to the person on whose behalf payment is being made. But don’t forget the most important part, the institute itself must be paid by the donor and the exclusion will be lost if the money first passes through the hands of the beneficiary of the gift.
• If this year has been a disappointment when it comes to earnings, it might be a good time to make a conversion to a Roth IRA. You will be taxed on the transfer but if done correctly can result in tax savings since the transfer will be hit with a lower rate than usual.

See Julius H. Gianmarco,  25 Year End Estate Planning Tips (Part 1/3), Wealth Strategies Journal, December 14, 2015.