“Gifting and Estate Planning: How to Maximize Your Year-End Contributions”

The holiday season is a time for giving, and as the year draws to a close, it’s the perfect moment to consider how your generosity can also support your estate planning goals. Beyond spreading cheer to your loved ones, strategic gifting can reduce your taxable estate, provide future financial security for your family, and even support meaningful charities—all while taking advantage of year-end tax benefits.

Start by reviewing the annual gift tax exclusion, which in 2023 allows you to gift up to $17,000 to any individual without incurring gift taxes. Consider gifting to children, grandchildren, or other relatives to help them with education costs, home purchases, or building their savings. These gifts, given in a festive spirit, also reduce the value of your taxable estate, potentially saving your heirs substantial taxes in the future.

If you’re charitably inclined, think about making donations before December 31. Contributions to qualified charities can be deducted from your income, lowering your tax liability while supporting the causes you care about. Consider gifting appreciated assets like stocks or real estate—this strategy avoids capital gains taxes and increases the overall value of your gift. It’s a win-win, spreading holiday joy while strengthening your philanthropic legacy.

Don’t overlook the benefits of using trusts, such as irrevocable trusts, to hold and distribute gifts. Trusts allow for greater control over how and when assets are used, ensuring that your generosity continues to have a positive impact long after the holiday season ends. Additionally, reviewing your beneficiary designations on retirement accounts and life insurance policies can ensure that your gifts go exactly where you intend.

As you settle in by the fire with family and friends, consider talking about your gifting plans. Clear communication helps everyone understand the purpose behind your generosity and the legacy you’re building. With the help of a knowledgeable estate planning attorney or financial advisor, you can fine-tune your year-end contributions to align with both your holiday spirit and your long-term goals.

Make the end of the year truly meaningful by turning your festive giving into a well-thought-out strategy that benefits your family, your community, and your legacy.