Finishing Strong: How Year End Estate Planning Paves the Way for a Peaceful New Year

The year’s end brings several requirements, such as gathering your documents and preparing for tax season. Many people focus on New Year’s resolutions and things they want to accomplish in the next 12 months. In the middle of all this are the holidays, when important tasks may be lost in the shuffle and put off until after January 1^st. 

Whether you have an existing estate plan or considering creating one before the end of the year, you can easily put a plan in place that will provide you with less stress and more peace of mind for the new year. In this post, we discuss how the end of the year is a great time to make and move forward on these plans.

Why Your Estate Plan Needs Review

First, let’s look at those of you with an existing estate plan. If you haven’t updated your will or trust and you’ve had life events or life changes this past year, you should begin reviewing and reevaluating your estate plan to ensure that it aligns with your current situation. For instance, have you gotten married, divorced, remarried, or welcomed children or grandchildren in the last year? Your will-based or trust-based estate plan must be updated to reflect such changes. Ohio families with existing plans that need to be revised would be wise to work with an experienced Ohio estate planning lawyer to ensure that their plan accurately reflects their wishes.

Taking time for year-end estate planning check-ins can provide renewed peace of mind, and set the stage for a more secure new year. In short, finishing strong with a comprehensive estate review is one of the best gifts you can give yourself and your loved ones.

Why Year-end Estate Planning Matters

Second, let’s look at why year-end estate planning matters for everyone. Here are three primary reasons why you should take advantage of estate planning at the year-end.

1. Taking Advantage of Tax Opportunities. The end of the year is a critical period for tax planning. Many estate planning strategies are closely tied to annual tax deadlines, including charitable giving, gifting, and retirement account distributions. Reviewing your estate plan before December 31 allows you to:

• Maximize annual gift tax exclusions.
• Make charitable contributions that benefit both your favorite causes and your tax situation.
• Review required minimum distributions (RMDs) from retirement accounts
• Reassess your overall tax strategy with your attorney and financial advisor

These steps can help minimize your tax burden and ensure more of your legacy goes to your loved ones or chosen charities.

2. Reflecting on Life Changes. Much can happen in a year—marriages, divorces, births, deaths, and abrupt changes in financial circumstances. Year-end estate planning allows you to review and update your documents to reflect on these life events, or put a plan in place to protect your new family members. Ask yourself:

• Have you welcomed new family members, such as a child or grandchild?
• Has your marital status changed?
• Have you acquired or sold significant assets?
• Have you moved, especially into or out of Ohio? Will and estate plans are governed by the states, meaning your estate plan could be impacted or even invalidated.

Having an updated will, living trust, power of attorney, advanced directives, and beneficiary designations ensures your wishes are documented and legally enforceable.

3. Preventing Family Disputes. One of the greatest gifts you can give your family is clarity about your wishes in the event anything happens to you. Non-existent, outdated or incomplete estate plans are a leading cause of family conflict and legal disputes. Under Ohio intestacy laws, your estate assets could even be distributed to someone you didn’t intend without a will. By making year-end estate planning a priority, you:

• Communicate your wishes regarding assets, guardianship, and healthcare decisions.
• Reduce the risk of misunderstandings or disagreements among heirs
• Provide your loved ones with guidance during what can be a sensitive period

Having these conversations while everyone is together for the holidays can foster needed transparency and understanding.

Key Steps for Year-end Estate Planning

1. Review Any Existing Estate Plan Documents. Start by reading through your will and any living trusts you already have established. Are your named beneficiaries and executors still appropriate? Have you selected alternate agents in case primary individuals are not available? Do your instructions reflect your current intentions? If not, now is the time to make these important updates. No matter how often you’ve told someone they will inherit something from you when you die, they will probably not receive anything if it’s not in writing.

• Check Beneficiary Designations. Assets like life insurance policies, retirement accounts, and payable-on-death bank accounts pass directly to named beneficiaries, regardless of what your will says. These assets are not part of probate. Review these designations annually to ensure they match your current wishes.

• Update All Powers of Attorney. Durable powers of attorney for finances and healthcare are essential if you become incapacitated. Designate agents to handle your healthcare, financial, and other decisions on your behalf if you can’t speak for yourself. Confirm that your chosen agents are still able, willing, and available to serve and that their contact information is current. Otherwise, your loved ones won’t know your wishes and may not make important decisions the way you intended.

• Consider Charitable Giving. The year’s end is a popular time for charitable donations. If philanthropy is part of your legacy, discuss strategies such as donor-advised funds, charitable trusts, or direct gifts with your estate planning attorney. These options can provide tax benefits, and support causes you to care about while preserving your legacy.

• Organize and Communicate. Make sure your important documents are organized and accessible. Let your loved ones know where to find your will, trust documents, insurance policies, and other important documents. Include contact information for your attorney and financial advisor so your survivors can contact them immediately.

The Benefits of Proactive Planning

Making year-end estate planning a tradition offers several long-term benefits:

• Peace of Mind: Knowing your affairs are in order allows you to focus on enjoying the holidays and the new year.
• Family Harmony: Clear, updated plans reduce the risk of confusion and conflict at a difficult time.
• Financial Security: Smart planning protects your assets and minimizes taxes.
• Legacy Preservation: Your values and wishes are honored, ensuring your legacy lives on.

Without an updated estate plan, your loved ones will be at a disadvantage when they need this help the most.

Special Considerations for Ohio Residents

Cleveland and Ohio residents should be aware of state-specific estate planning issues:

• Ohio Estate Taxes: While Ohio no longer has a state estate tax, federal estate tax may still apply to larger estates.
• Healthcare Directives: Ohio recognizes living wills and healthcare powers of attorney, but the requirements may differ from other states. Examining these documents now will ensure they are correct and compliant with Ohio law.
• Probate Rules: Ohio’s probate process can be time-consuming. Proper planning—such as using trusts or joint ownership—can help your family avoid unnecessary delays and expenses.

An experienced Cleveland estate planning attorney can ensure that your estate plan complies with Ohio law and is tailored to your unique needs.

How to Get Started

If you’re ready to finish the year strong, here are some actionable steps:

1. Schedule a review: Set up your consultation appointment with a qualified Cleveland estate planning attorney to discuss your current documents and any necessary updates.
2. Gather your documents: Collect your will, trusts, insurance policies, retirement account statements, and any prior powers of attorney or healthcare directives.
3. Discuss with family members: Consider having a family meeting to share your intentions and answer questions. Open communication now can prevent confusion later during a time of emotional upheaval.
4. Set a Reminder: Make year-end estate planning an annual habit—review your plan every December or after any major life event.

Year-end estate planning isn’t just about checklists and paperwork. It’s about protecting your loved ones, securing your legacy, and entering the new year with confidence. By taking time now to review and update your existing estate plan or to create your first estate plan, you’re giving yourself and your family the gift of peace of mind.

Ready to finish the year strong?

We understand that estate planning can be difficult and confusing without anyone to help or answer your questions. That’s why we’re here. Rhodium Law is ready to help you with starting or updating your estate plan–and all the related important decisions–so you can start the new year on solid ground.

Reach out to our Cleveland estate planning team and pave the way for a peaceful, prosperous new year. Call us today at 216-699-8145, or use our online booking form to schedule your appointment.