Its time to review your end-of-year planning checklist!
It’s hard to believe that Dec. 31 is fast approaching. Before the busy holiday season, it could be to your advantage now to take steps in preparation for end-of-year charitable giving. To help you, here’s a checklist of actions for you to review as Dec. 31 approaches.
o Review your current will and trusts. These may need to be updated due to major changes in your life, such as births or deaths or a move to another state. Consider including a favorite charity in your will. You can designate a certain amount or a percentage and there is no minimum.
o Take inventory and make a written record of the contents of any safe-deposit box. Give a copy to a trusted family member or executor of your estate.
o Review and update beneficiaries of your life insurance policies and retirement plan assets. Including a favorite charity as a beneficiary is an excellent way to donate and reduce estate taxes.
o Name designated heirs or charities to receive bank account proceeds at your death. Using a “payable on death” (POD) designation to re-direct an account without unnecessary probate problems.
o Make sure your durable powers of attorney for health care and living will are current.
o Offset your capital gains with losses. As volatile as the market can be, many portfolios may have both gains and losses. If you plan to make gifts of stocks to a charity, it is beneficial to make those gifts with stocks that have appreciated in value (worth more now than you originally paid for them). Appreciate securities must be transferred directly to the charity in order to avoid tax on capital gain. If the stock has depreciated in value, it may make more sense for you to sell the shares and donate the cash proceeds, thus preserving the ability to declare capital loss on your tax return.
o Increase your spendable income by funding a charitable gift annuity. A gift annuity allows you to make a future gift to the mission of a charity while at the same time receiving income throughout your lifetime.
o Complete charitable contributions by Dec. 31. Honoring a family member or friend with a donation during the holiday season is a memorable gift and may offer you tax benefits.
This information is not intended as legal or tax advice. Please consult your advisors.