3 Estate Planning New Year’s Resolutions for 2021
Here are three wise ways to revise your estate plan for 2021; a Central Florida estate planning lawyer can help you implement these and other estate planning strategies.
Make Your IRA Investments Benefit Their Beneficiaries
In 2019, the laws about IRAs changed; under the new law, most beneficiaries must receive their inherited IRA distributions over a period of 10 years or less. The only people who can spread out their distributions over a lifetime and your spouse and relatives close in age to you, such as your siblings. Anyone 10 years younger than you or more must get all the money over a relatively short period. If a beneficiary is a minor when the original IRA owner dies, the 10-year distribution period begins when the beneficiary turns 18.
Make the Most of the Annual Gift Tax Exclusion
The annual gift tax exclusion benefits everyone. In 2020, you can give a tax-free cash gift of up to $15,000 to as many people as you choose. If your grandchildren’s eyes used to light up when they saw the tree surrounded by presents, their smiles will light up the computer screen this year when you tell them they get a tax-free cash gift at the end of this most challenging year.
Make Payments Toward Your Descendants’ Medical or Educational Expenses
Even before the pandemic, many people in the younger generation were carrying around a heavy burden of debt, in large part due to unexpected medical expenses and the rising cost of postsecondary education. If you make payments toward your family members’ medical bills or pay a portion of your grandchildren’s college tuition directly, neither you nor the beneficiary will pay taxes on that money. Helping your grandchildren avoid student loan debt is one of the best gifts you can give them.
Remember, estate planning isn’t all about worrying about money while your relatives are only worried about losing you. The most fun parts of estate planning involve giving gifts now and making plans for thoughtful investments that will pay off in the long term.
Contact an Attorney Today for Help
A Clearwater estate planning lawyer might think of it as your estate plan, but you might think of it as a celebration of the fact that your children are old enough to appreciate practical gifts and you have the means to give them. Contact William Rambaum for help today.