Financial Planning Corner

12.12.16 // Markets & Investing // Blog Article //

Financial Planning Corner
December 12th, 2016

As we close the year, it is time to think about some strategic moves that may help your family, your favorite charities and your tax return. If you plan to leave money to your family in your will and you have a taxable estate (over $5.49 million in 2017 per person) you should consider an annual gifting strategy. You can gift up to $14,000 per person in cash or securities. Please contact us to discuss gifting strategies specific to your situation.

Gifting to a 529 college plan is another way to ensure your legacy and ease the ever-climbing expense of higher education. Anyone can gift to a 529 plan, even if they are not the owner of the account. Before you gift, you should ask who owns the 529, as they control the investments and distribution at the appropriate time. 529 plans are unique gifting opportunity, in that you can pre-fund a gift worth five years of annual gifts, $14,000 per recipient, in year one. As a married couple, you can send $140,000 to each child to prefund 5 years of your annual gifts. Whether it is a big gift or a small one - it’s not just a gift to the children, it is a gift to the parents as well. You don’t even need to drive to the mall!

For those of you over 70, we will be reaching out to you to make sure you have distributed your required minimum distributions from your IRA. If you have an old 401k at a former employer or IRA assets elsewhere, make sure those accounts have met that requirement as well.

We have already looked at the realized gains to date and are initiating tax loss selling to help mitigate the taxable gains. If you expect to make a large January 15th estimated tax payment, we can help you estimate your expected gains to hone in on the right number.

Finally, for the charities you feel passionate about: if you are planning a large gift, consider gifting highly appreciated securities instead of cash. Most charities will happily take securities. Instead of selling a stock, paying tax on the gain and then sending cash, you can avoid the capital gain and still deduct the full market value of the gift, subject to income limitations, of course. If you are interested, contact us today. The process takes a bit longer than a regular cash transfer.

In January, we will start the annual reviews for 2016. If we don’t talk to you before that, have a wonderful holiday and a joyous new year!

Happy Holidays,
Meagan Kenny Moll, CFP®, CIMA®, CPWA®
Meridian Wealth Advisors
Director & Wealth Advisor

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