Two Important Annual Tasks to Support Your Estate Plan

Each year, it’s essential to review your financial situation, especially when preparing for tax season. Addressing key aspects of both your estate plan and finances early on can improve tax efficiency and ensure everything is in order for the future. Here are two crucial tasks you should focus on annually to maintain a strong financial and estate plan.

Retirement Account Reviews: Key for Financial and Estate Planning

One of the most important financial tasks each year is reviewing and funding your retirement accounts. In 2024, the contribution limits for common retirement plans such as 401(k)s and 403(b)s are $23,000, or $30,500 if you are age 50 or older. For IRAs, the limit is $6,500, or $7,500 if you’re over 50. Making the maximum contribution helps secure your financial future and can also benefit your estate plan.

Why is this important for estate planning? Retirement accounts can hold significant assets that you want to pass on to your beneficiaries. Regularly reviewing and updating the beneficiaries listed on your retirement accounts ensures that these funds are transferred as you intended, without going through probate. It’s also a good time to confirm that your financial and estate goals are aligned.

Annual Gifting: Maximize Tax Benefits

The second important task is making annual exclusion gifts. In 2024, you can give up to $17,000 per person without triggering gift tax. This amount doubles to $34,000 if you’re a married couple gifting together. These gifts are a simple way to transfer wealth to loved ones while reducing the size of your taxable estate. 

You can make annual exclusion gifts to as many people as you wish, providing a way to support family members or friends without incurring extra taxes. These gifts also reduce the value of your estate, potentially minimizing estate taxes down the road. 

By taking these two annual steps—funding your retirement accounts and making annual gifts—you can strengthen both your financial future and estate plan. It’s important to work with professionals, including your financial advisor, CPA, and estate planning attorney, to ensure that your strategies are up to date and aligned with your goals. Staying proactive each year keeps your estate plan effective and tax-efficient.

For more information, contact our office at Askew & Associates, P.A. by calling 954-546-2699.

Disclaimer: this blog post is not intended to be legal advice. We highly recommend speaking to an attorney if you have any legal concerns.