As we approach Thanksgiving, the year is quickly drawing to a close. Here are several matters that you may want to address before 2018 is gone.
- Annual Exclusion Gifting – Effective January 1 of this year each person is now entitled to gift up to $15,000 per person, per year ($30,000 for a husband and wife) free from gift tax implications. If you don’t use it, you lose it. This powerful planning strategy can be enhanced by gifting interests in a partnership, LLC or other entity where the opportunity exists to claim a discounted value.
- Qualified Charitable Distributions (QCDs) from Your IRA – An individual age 70½ or older can make direct charitable gifts from an IRA of up to $100,000 to public charities. The distribution cannot be to a donor advised fund, supporting organization or most private foundations. These distributions, which can include your required minimum distribution, are made tax-free. A QCD reduces your adjusted gross income and taxable income.
- Buy-Sell Agreement Valuations – Many Buy-Sell agreements require an annual agreement by the owners as to the value of the company. Failure to properly value the company as required by the agreement may result in a serious discrepancy (high or low) in the value given upon the occurrence of a triggering event. Be sure you have your annual valuation agreement in place.
- Annual Review of Estate Planning Documents – Things are always changing. Things change in our personal life because of births, deaths, disabilities, divorces, etc. Laws are also very likely to change from time to time. There has been several significant changes in state and federal law in the last few years. Many older estate plans have been prepared to avoid a potential estate tax problem that no longer exists while exposing these same individuals to higher income taxes. Regular annual review and updating of your trust will go a long way toward making sure your trust works as well when it needs to as the day you signed it.
- Annual Business Review Meeting – The annual business review meeting is an opportunity to review your organization’s legal documents to ensure that they are complete, up to date and in compliance with current law. It is also an opportunity to review your exit goals to determine what actions can and should be taken in the coming months to help achieve those goals. This is a meeting that should include your insurance, financial, legal and tax advisors.
We hope 2018 has been a great year for you and that 2019 will be even better. Please call us if you would like assistance with any of the strategies mentioned in this newsletter.