As the end of the year approaches, it’s the perfect time to take a closer look at your financial plans—including your estate planning. Life’s twists and turns can significantly impact your future plans, making it essential to reassess your goals annually. While the original inspiration for this checklist comes from US Bank’s year-end financial checklist, we’ve tailored it specifically for those in Las Cruces who want to ensure their estate plans remain up to date and effective.
Why Year-End Reviews Matter for Estate Planning
Life events—such as marriage, divorce, the birth of a child, or the loss of a loved one—can make a big difference in how your estate plan works. If your plan hasn’t been reviewed recently, now is the time to make adjustments to safeguard your family’s future. Read more in our article, What Is an Estate Planning Checkup?
Here’s a step-by-step year-end checklist to help ensure your estate plan aligns with your current needs and goals.
1. Review Your Will and Trust
Changes in your life may require changes to your last will and testament or trust. Review these documents to ensure they reflect:
- Recent marriages or divorces.
- New children or grandchildren.
- The loss of family members or changes in relationships.
Tip: Check who you’ve named as beneficiaries and trustees to ensure they are still the best fit.
2. Evaluate Your Beneficiary Designations
Many accounts—including retirement funds, life insurance, and payable-on-death accounts—pass directly to beneficiaries without going through probate. Reviewing and updating these designations regularly is critical to avoid unintended consequences.
Las Cruces Insight: Beneficiary laws vary by state, so consulting with an experienced estate planning attorney ensures your designations align with New Mexico laws.
3. Plan for Taxes
Even though federal estate tax exemptions are currently high, they are set to decrease in 2025. Now is the time to:
- Use tax-free annual gifting allowances (up to $18,000 per recipient in 2024).
- Take advantage of the lifetime gifting exemption, which allows you to gift up to $13.61 million tax-free in 2024.
Tip: These exemptions are subject to change, so acting before the 2025 reduction may be wise.
4. Review Agents Listed for Powers of Attorney and Healthcare Directives
Ensure your financial and healthcare power of attorney documents reflect your wishes. Review your existing documents, or work with an experienced Las Cruces estate lawyer to designate someone you trust to make decisions on your behalf if you become incapacitated.
5. Assess Your Insurance Coverage
Insurance is a cornerstone of financial security. Review your life, disability, and long-term care policies to confirm they meet your current needs and update beneficiaries as needed.
Tip: Rising healthcare costs in New Mexico highlight the importance of adequate long-term care planning or obtaining long-term care insurance.
6. Maximize Charitable Donations
Charitable giving not only benefits the causes you care about but can also provide valuable tax advantages. As the year ends, take time to review your contributions. If you’re age 70½ or older, consider making a Qualified Charitable Distribution (QCD) directly from your retirement account to a charity. This can reduce your taxable income without affecting your itemized deductions. You can also donate appreciated assets, such as stocks, to avoid paying capital gains taxes while potentially claiming a deduction for the full value of the asset. Whether you’re supporting local Las Cruces nonprofits or larger national organizations, a strategic approach to giving can make a meaningful impact while aligning with your estate planning goals.
Tip: Work with an estate planning attorney to ensure your charitable giving is incorporated seamlessly into your overall estate plan.
7. Protect Digital Assets
From email accounts to cryptocurrency, digital assets are often overlooked in estate planning. Add a digital assets clause to your will or trust, and make sure a trusted person has access to your login credentials.
8. Communicate Your Plan
One of the most overlooked steps in estate planning is communicating with loved ones and family members. Share your plans with your loved ones to avoid confusion or disputes in the future.
Pro Tip: Holding a family meeting can provide clarity and allow you to explain your decisions.
Take the Next Step in Your Las Cruces Estate Planning Journey
Year-end is the ideal time to focus on your future. Don’t wait until it’s too late—protect your assets and loved ones by ensuring your estate plan is comprehensive and up to date.
At E-Law, we guide Las Cruces families through every aspect of estate planning. From wills and trusts to powers of attorney, our compassionate team is here to help you craft a plan that works for your unique needs. Request a discovery call and find out how we can help secure your family’s future.
Let’s make 2024 a year of peace of mind and preparedness!
