As the last few days of 2015 approach, many Philadelphia residents are considering whether they need to take any steps to address their financial needs. In terms of estate planning, the end of each year is a great time to review the existing plan and make any necessary changes. The following choices are just some of the options available to ensure that estate planning remains on track as 2016 approaches.
Many families want to ensure that they do not exceed the federal estate tax limit, which currently sits at $5.43 million. Any wealth beyond that amount is subject to an estate tax, which can be as high as 40 percent. An effective way to reduce the value of one's estate is to make annual gifts to family members. There is no limit to the number of gifts that can be made, but each individual can receive no more than $14,000 in a calendar year. Charitable contributions are also an effective means of reducing an estate.
Another estate planning approach focuses on having the proper level of life insurance. This need can change over time, as children grow up and become capable of providing for their own needs, or when a spouse begins to encounter significant medical expenses later in life. A yearly review of existing coverage is the best way to ensure that the right level of protection is in place, and gives families the chance to augment their coverage to suit changing needs.
As the end of the year approaches, many Philadelphia families will turn their attention to estate planning needs. This is a great time to review the existing plan and make changes where needed. It is also comforting to enter a New Year with the assurance that these matters have been taken care of, and that one's family is protected from financial turmoil if a loss should take place in the coming year.
Source: investors.com, "5 Changes To Make To Your Financial Plan Now", Marie Beerens, Dec. 18, 2015