As the year comes to a close, most people are focused on holiday celebrations and New Year’s resolutions. But the end of the year is also one of the best times to review your estate plan and make sure everything is in order. Tax laws change, family circumstances evolve, and documents that were perfectly adequate a few years ago may no longer reflect your wishes. Taking a few hours to review your estate plan before December 31 can save your family significant stress, money, and legal complications down the road.
Why Year-End Is the Right Time for an Estate Plan Review
The end of the year creates a natural checkpoint for reviewing important financial and legal documents. Tax provisions may be expiring or changing, annual gift tax exclusions reset on January 1, and any major life events from the past year need to be reflected in your documents. Additionally, year-end is when many people meet with financial advisors and accountants, making it a convenient time to coordinate your estate plan with your broader financial strategy.
Review Your Will and Trust Documents
Check for Life Changes
Think about whether any significant life events occurred during the past year. Marriage, divorce, the birth or adoption of a child, a death in the family, or a major change in your financial situation are all reasons to update your will or trust. If you got married this year and your will still names a former partner as your primary beneficiary, that needs to be corrected immediately.
Review the specific terms of your will or trust to confirm that asset distribution still aligns with your wishes. If you have a trust, verify that all intended assets have been properly transferred into it. A trust that exists on paper but does not hold any assets provides no benefit. Our wills and trusts attorneys can help you review your documents and make any necessary updates.
Update Your Executor and Trustee Designations
Confirm that the people you have named as executor of your will and trustee of your trust are still willing and able to serve. Life circumstances change, and the person you chose five years ago may no longer be the best fit. Consider whether your designated executor or trustee is still in good health, still lives nearby or is accessible, still someone you trust with this responsibility, and still willing to take on the role.
Review Beneficiary Designations
This is one of the most commonly overlooked items in estate planning. Beneficiary designations on life insurance policies, retirement accounts, bank accounts, and investment accounts override whatever your will says. If your 401(k) still lists your ex-spouse as the beneficiary, that is where the money will go regardless of what your will provides. Understanding the relationship between per stirpes and per capita designations can also help you ensure your assets pass to the right people in the right proportions.
Pull out your beneficiary forms for every account and policy you own and confirm they are current. Pay special attention to contingent beneficiaries as well. If your primary beneficiary predeceases you and you have not named a contingent beneficiary, the asset may end up going through probate.
Take Advantage of Annual Gift Tax Exclusions
Each year, you can give up to a certain amount to any individual without triggering gift tax or using any of your lifetime estate and gift tax exemption. For 2025, the annual exclusion is $19,000 per recipient. If you are married, you and your spouse can combine your exclusions to give up to $38,000 per person.
Making gifts before December 31 is a smart strategy for reducing the size of your taxable estate. These gifts can be made in cash, securities, or other assets. You can also make unlimited tax-free gifts by paying someone’s medical bills or tuition directly to the provider or institution.
Review Your Powers of Attorney and Healthcare Directives
Your power of attorney and healthcare directive are just as important as your will, but they often receive less attention. Confirm that the agents you have named in these documents are still appropriate choices. If you named a friend who has since moved across the country, or a family member whose relationship with you has changed, it may be time to designate a new agent.
Also verify that your healthcare directive reflects your current wishes regarding medical treatment and end-of-life care. Your views on these matters may have changed since you originally created the document, especially if you have experienced health issues or witnessed the medical care of a loved one.
Consider Pennsylvania Inheritance Tax Implications
Pennsylvania is one of a handful of states that imposes an inheritance tax on assets transferred at death. The tax rate depends on the relationship between the decedent and the beneficiary, ranging from 0 percent for surviving spouses to 15 percent for unrelated beneficiaries. Year-end is a good time to review your estate plan with an eye toward minimizing this tax burden. Our complete guide to Pennsylvania inheritance tax rates provides a detailed breakdown of the current rates and exemptions.
Strategies for reducing inheritance tax include gifting assets during your lifetime, using irrevocable trusts, and structuring property ownership to take advantage of available exemptions. An estate planning attorney can help you identify opportunities specific to your situation. Understanding how irrevocable trust taxes work in Pennsylvania is another important consideration if you are exploring trust-based strategies.
Organize Your Important Documents
Make sure your important documents are organized, accessible, and stored safely. Your executor and family members should know where to find your will, trust documents, powers of attorney, healthcare directive, life insurance policies, financial account information, real estate deeds, and tax returns. Consider creating a master document that lists all of your accounts, policies, and the location of important paperwork. Store originals in a fireproof safe or a bank safe deposit box and give copies to your attorney and trusted family members.
Schedule a Meeting With Your Estate Planning Attorney
The end of the year is the perfect time to sit down with your estate planning attorney for a comprehensive review. Even if you do not think anything has changed, a professional review can uncover issues you might not have considered. Tax law changes, new legal requirements, and evolving family dynamics all have implications for your estate plan. Contact Gieg and Jancula today to schedule your year-end estate planning review and start the new year with confidence and peace of mind.