Before the end of the year, it’s a good time to think about starting your estate plan. If you don’t have one yet, then considering one as your New Year’s resolution is a good option.
Of course, there are other reasons to consider building your estate plan now. You’ll be protecting yourself and your loved ones in the case of your sudden death or illness. You’ll be able to set up trusts and link up your life insurance policy to make sure it pays out to who you want it to go to. You can take this time to start planning for sickness now, which is particularly pertinent as the country moves into the new flu season.
You can also start planning for your beneficiaries
Perhaps one of the better reasons to start planning now is because you’re going to want to take advantage of the new estate and gift tax limits in 2021. The estate and gift tax exemption allows you to pass on assets without paying taxes. In 2020, you could have an estate up to $11.58 million and pay no federal estate taxes. In 2021, you’ll be able to have an estate of up to $11.7 million.
The annual gift tax limit will stay the same at $15,000. So, if you plan to spend down part of your estate’s value, remember that you can individually gift up to $15,000 to each person you’d like that money to benefit. If you and your spouse are gifting, you have up to $30,000.
Changes may come after this year’s presidential election, so it’s a good idea to talk to your attorney about what to expect. 2020 has been a year with lots of twists and turns, but your estate plan can be one thing that you keep control over moving ahead