Articles & Alerts

The end of the year is the perfect time to review your finances and make sure you are well-positioned for the coming year. With that in mind, here are five financial moves that will help make sure you are on top of your current financial situation and maximizing potential benefits.

1. Minimize your tax burdens. The holidays are a perfect time to make charitable contributions, which can help lessen the income taxes that you have to pay. You should also check your November brokerage account statements for any stocks that have unrealized losses as selling before year end can offset any realized capital gains and lessen your tax bill.
2. Gift assets to fully utilize the annual gift tax exemption. The annual gift or cash exemption is $15,000 (double that for couples) per recipient. If you plan on gifting some of your estate, make sure you are fully utilizing this exemption as the gift needs to be made before December 31.
3. Review all of your accounts. Over the years, you may have accumulated a variety of accounts in different locations. This is the time to check if these accounts are serving their intended purpose. If not, it may be time to simplify by consolidating or closing unnecessary accounts.
4. Review or create an estate plan. Although no one likes to consider the possibility of their passing, having an estate plan is important to make sure that your wishes are followed while minimizing any taxes. Your estate plan should include making sure that your will, healthcare preferences, and power of attorney are current.

Additionally, this year may be a good time to review your estate to take advantage of a historically high Federal gift tax exemption coupled with depressed values (largely attributable to the pandemic). Currently, couples have the ability to transfer up to $23 million out of their estate with no gift tax payable.  This exemption is scheduled to be reduced by at least half in five years, or possibly sooner, through new legislation.

For more information on relevant estate planning topics, see these recently published articles from our Year-end Trusts & Estates Series:

• Preserving Your Family Legacy with Spousal Lifetime Access Trusts (SLATs)
• Dynasty Trusts: Preserve Your Legacy for Generations

5. Meet with your financial advisor. This is perhaps one of the most important steps to take before the end of the year. A financial advisor can fully review your holdings and help guide you in the right direction. Be sure to review portfolios with them to make sure your current asset allocation aligns with your short-term and long-term goals.

To discuss year-end financial planning or any other matter, contact your Anchin Relationship Partner or Tom Brignati, Director at Anchin Private Client at 212.863.1217.