As the end of 2020 approaches, it’s important to give thoughtful consideration to year-end planning opportunities.

Here is a checklist of common strategies and opportunities. Not all of these techniques will be right for you, but it can be a helpful starting point for spotting issues or opportunities to discuss with your legal, financial, and tax professionals.

Estate Planning

  • Have you, your spouse, or another close family member or beneficiary become disabled or had a significant health diagnosis?
  • Have you acquired new real estate?
  • Have you started a business or obtained new professional licensing?
  • Have you gotten married, separated, or divorced since completing your estate plan?
  • Has your family had any births, deaths, marriages, or divorces since completing your estate plan?
  • Have any of your minor children begun driving?
  • Have any of your minor children turned 18 years of age?
  • Have you opened new financial accounts, insurance policies, or begun working with a new financial advisor?
  • Have you changed employers and work-based benefits?
  • Is an aging parent beginning to show signs of decline?
  • Is it time to upgrade from a Will to a Trust-based estate plan? Some possible reasons to consider this strategic move include:
    • Owning real estate in multiple states
    • Having an estimated estate in excess of $500,000
    • You have a family member or beneficiary who is expecting an inheritance but you wish to disinherit them
    • You’re advancing in age and want someone to manage your assets and pay your bills
    • You want to simplify your affairs for your heirs to minimize probate fees and allow for a smoother transition upon your death
    • If you want to learn more, give us a call to discuss or register for an upcoming seminar.
  • Should you update your estate plan to protect your children and grandchildren from future divorces and lawsuits?
  • If you’re 50 or older and don’t have a long-term care plan yet, it may be time to get started.
  • Is it time to sit down with your attorney and discuss whether you have enough life insurance to provide the future income needed to support your family, cover final expenses, and cover future major expenses?
  • Is it time to sit down with your attorney for an asset protection analysis to determine your assets at risk to lawsuits, taxes, and other risks and discuss strategies to minimize your risk?
  • If you are a CFEP client, contact us at [email protected] and we’ll send you our Client Update Worksheet.

Retirement Accounts

  • If you opened any new retirement accounts or work-based benefits, review and update your beneficiary designations to ensure they are consistent with your estate plan.
  • If you changed financial advisors or financial institutions, review and update your beneficiary designations to ensure they are consistent with your estate plan.
  • Review your estate in plan in light of the SECURE Act that was enacted at the beginning of 2020 to determine whether your estate planning needs to be updated and/or additional planning is needed.
  • Did you reach your Required Beginning Date, or are you taking an RMD from an inherited IRA? If so, under the CARES Act, RMDs are waived for 2020.
  • If you’ve been financially impacted by the pandemic and are under age 59 ½, under the CARES Act, you can take a withdrawal from retirement savings without paying the standard 10% early withdrawal penalty and the income taxes on the withdrawal will be spread out over the next three years unless you elect otherwise.
  • If you expect your income to increase in the future, then consider whether any of the following strategies may make sense for you:
  • Make Roth IRA and Roth 401(k) contributions and/or Roth conversions
  • Consider making after-tax contributions to your 401(k) if permitted by the plan
  • If you are 59 ½ years of age or older, consider accelerating 401(k) and traditional IRA withdrawals to fill up lower tax brackets
  • If you expect your income to decrease in the future, then look for strategies to minimize your tax liability now, such as maximizing contributions to traditional IRA and 401(k) plans instead of Roth accounts.
  • If you are maxing out your 401(k) or traditional IRA contributions, it may be time to explore additional retirement planning strategies.

Income & Capital Gains Taxes

  • Under the Tax Cuts and Jobs Act (TCJA) tax increases are expected over the next few years as various provisions expire. In addition, many are speculating about the possibility of tax increases to offset the various pandemic-related stimulus bills. Thus, while it may be tempting to want to reduce this year’s tax liability and push taxes off to a future, consult with your tax strategist to determine whether it may be prudent to incur the tax liability now under the current rates rates verses risking higher tax rates in the future.
  • If you’re on the threshold of a tax bracket consider strategies to defer income or accelerate deductions and to manage capital gains and losses to keep you in the lower tax bracket. In addition to the standard income tax brackets, consider the following:
    • If taxable income is above $441,450 ($496,600 if Married Filing Jointly (MFJ)), any capital gains will be taxed at the higher 20% rate.
    • If your Modified Adjusted Gross Income (MAGI) is over $200,000 ($250,000 if MFJ), you may be subject to the 3.8% Net Investment Income Tax on the lesser of net investment income or the excess of MAGI over $200,000 ($250,000 if MFJ).
    • If you are on Medicare and your 2018 MAGI exceeded $87,000 ($174,000 if MFJ), review the impact of Income-Related Monthly Adjustment Amount (IRMAA) surcharges.
  • For 2020, the CARES Act created a $300 above-the-line charitable deduction for contributions to certain qualifying charities.
  • Consider whether a Charitable Remainder Trust may be a win-win strategy for your retirement plans creating a tax break, charitable deduction, and still leaving a legacy for your beneficiary.
  • If you have any capital losses for this year or carryforwards from prior years, there may be tax-harvesting opportunities.
  • If you’ve had a change in marital status, consider how this may impact your tax liability.

Business Owners

  • If you own a pass-through business, review the Qualified Business Income (QBI) Deduction eligibility rules with your tax strategist.
  • Examine the impact of using a Roth vs. traditional retirement plan and its potential income on your taxable income and QBI.
  • If you have business expenses, consider whether it makes sense to defer or accelerate the costs to reduce your overall tax liability between this year and future years.
  • Some retirement plans must be opened before the year-end, so if you’re considering this option, make sure you look into this before year-end.
  • If you think 2021 might the year to switch to S-Corp status for tax purposes, schedule a meeting with your tax strategist now as the deadline to file the election is March 15, 2021.
  • If you're working with a true tax strategist (not just a tax preparer), then you should be reviewing your 2021 business plan with your tax strategist and calendaring quarterly review meetings with your tax strategist.

Health Insurance

  • If you met your health insurance plan deductible for the year, consider incurring any additional medical expenses before the end of the year before your deductible resets for the new year.
  • Have you used up your Flexible Savings Account (FSA) for the year? If not, determine whether any unused funds can be rolled over to the following year or if there is a grace period to use the remaining funds.
  • If you will be turning 65 years old in 2021, begin examining your Medicare enrollment options.

Gifting & Gift Taxes

  • Do you plan to make gifts this year? If so, the gift tax rules allow you to give up to $15,000 per recipient (or up to $30,000 for married couples) this year gift-tax free and without having to file a gift tax return.* (And if you’re making such gifts around year-end, make sure the checks are cashed before the end of the year.)
  • You can make additional gifts for education gift-tax free above the $15,000 annual exclusion, but make sure the tuition checks are made out directly to the school. Contact your attorney or tax strategist for more specifics.
  • If you want to contribute to a 529 plan for a beneficiary, you can use the annual $15,000 gifting allowance cited above to make the gift tax-free, or you can make a lump sum contribution of up to $75,000 to a beneficiary’s 529 plan and elect to treat as if the gift were made evenly over a 5-year period so that it is gift tax-free.*
  • For estate tax planning purposes, it may be prudent to make gifts in excess of $15,000 per recipient, however, we strongly recommend you consult with your attorney before proceeding.*
    *CAUTION #1: Although the tax code allows for gifts of up to $15,000 gift-tax free, such gifts may harm your ability to qualify for future financial assistance for long-term care and nursing home care, thus you should consider with your elder law attorney before making such gifts.
    *CAUTION #2: Outright gifting to a beneficiary can be risky. There’s no creditor protection on the money, so it could be lost to a divorce or lawsuit, or just to irresponsible money management. Discuss with your attorney whether a trust may be a better vehicle for gift purposes to permit you to tax advantage of tax planning strategies while also keeping the assets protected for your beneficiary.

Estate Tax Planning

  • If your gross estate exceeds $3M, discuss with your attorney whether it’s time to begin incorporating estate tax planning strategies into your planning. Although the estate tax exemption is currently over $11M, it is scheduled to reduce to $5M adjusted for inflation at the end of 2025 (if not sooner under the new administration) and some tax strategies can take several years to fully implement. Keep in mind that wealth tends to grow exponentially so even if you’re below the current estate tax threshold, you could be on track to exceed it within the next few years.


  • If you have children who will be attending college in the next few years, begin to consider financial aid planning strategies.
  • Is it time to obtain or increase your umbrella liability insurance policy?


If you need advice or guidance regarding any of the strategies mentioned, contact our office at 919-443-3035 to discuss. We’ll let you know if it’s something we can assist you with, or we can help provide you with a referral to the appropriate professional for further assistance.

Jackie Bedard
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Attorney, Author, and Founder of Carolina Family Estate Planning