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Taking care of estate planning before year's end

It may seem hard to believe, but another year is coming to a close. Minnesota residents are undoubtedly busy with year-end events, including holiday events and getting tasks accomplished at work by the end of the month. There is one more item that should be put on individuals' to-do lists, however: creating or updating one's estate plan.

There are many different reasons to engage in estate planning by the end of the year. First, it may be a good time for some individuals to engage in gifting, which can lower the value of the person's taxable estate. A certain amount is eligible under federal law to be gifted each year, and, therefore, individuals who have not taken advantage of this process yet should act quickly in order to ensure they utilize the correct amount this year.

For others, now may be the time to simply update an existing estate plan that has not been revised for quite some time. An estate plan often mirrors a person's current situation in life, and, therefore, it is necessary to update the estate plan when significant changes occur over the years.

For instance, when new members are added to one's family, such as through birth or marriage, it may change a person's designated beneficiaries. The same may be true when family members or other loved ones pass away, as those deceased individuals may have been named as beneficiaries, personal representatives or in some other capacity in a person's estate plan.

Other individuals may experience a significant gain in assets over the years, which can change the individual's priorities or game plan when it comes to distributing those assets. In any event, everyone experiences changes of one kind or another, making it necessary to revisit an estate plan to make sure it matches the individuals' current situation and goals.

Source: Savannah Morning News, "Put estate planning on your holiday to-do list," Michael Smith & Richard Barid, Dec. 3, 2014

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