Estate Planning Resolutions for 2021
2020 has been a year unlike any other, to say the least. If you have spent most of this year holed up at home, only seeing your family and friends on video chat, it can be hard to believe that the pandemic has had its hold on Florida for eight months. There are only two months left in 2020, which means that it is time to start thinking about 2021. This means that it is time to revisit your estate plan, or to begin estate planning, if you have not already done so. The first step is to contact a Central Florida estate planning lawyer.
Assess How Your Situation Has Changed Since Last Year
What has changed this year for you and your family, whether or not the changes are related to the pandemic? Do you have new health concerns, or does your spouse? Did one of you retire this year, or have you decided when you will retire? Also think about your family members, even if they do not currently depend on you financially? Have your children or their spouses experienced a reduction in income because of the pandemic? Are your grandchildren planning to enter programs of study that will require them to borrow money?
Review Your Will and Update It, If Necessary
Writing a will when you are young and healthy is a great idea, but writing a will when you are young and never rereading it is a mistake. Before the end of this year, read your will and imagine what would happen if a probate court administered it tomorrow. Would your heirs benefit the way you want them to? Would there be any unresolved issues? How much of the estate would get gobbled up by creditors? If nothing else, reviewing your will might be a motivation to pay off your debts and live within your means. If your situation has changed drastically since you wrote your will, you might need to add a codicil or write a whole new will. If you wrote the will when you were 30 and single, but now you are 50 and married with two teenagers, it is definitely time for a new will.
Year-End Generosity
The annual gift tax exclusion is arguably the most fun part of estate planning. It enables you to give tax-free cash gifts to as many people as you choose. This year, the limit for the annual gift tax exclusion is $15,000 per recipient. By giving annual gifts to your family now, you reduce the estate taxes they will pay, plus you get to see them enjoy the gifts, even if all they do is use the money to pay bills or debts or put it in a savings account.
The Bottom Line
You should approach estate planning with the assumption that you will stay as healthy as you currently are for a long time. You might decide to stick with the plan you made several years ago. Don’t forget to benefit from the annual gift tax exclusion; everyone wins if you share your prosperity now instead of later.
Contact Us Today for Help
If you can’t wait to say goodbye to 2020, an experienced Tampa estate planning lawyer can help you focus on the future. Contact David Toback in Tampa, Florida to set up a consultation today.
Resource:
irs.gov/businesses/small-businesses-self-employed/frequently-asked-questions-on-gift-taxes#5
