Last week we explored 7 ways to spruce up your finances with smart, tax-advantaged financial tips to benefit your family and your wallet during spring cleaning and tax season:

1. Make a Qualified Charitable Distribution (QCD)
2. Front-load Your 401(k), IRA and Roth Contributions
3. Set Up a Roth IRA for a Child
4. Make Donations During Spring Cleaning
5. Give the Gift of Appreciated Stock Shares
6. Establish a 529 College Plan
7. Make a Roth Conversion

If you missed it, check out Part 1 HERE. This week, we’re continuing the financial spring cleaning with 7 more tips you can use to benefit your family this spring season and the year ahead. Let’s dive in…

8 | Tax Free Gifting: The 2024 Annual Gift Exclusion

Don't underestimate the power of spreading the wealth amongst your family, friends and loved ones. Did you know that in 2024, you can gift up to $18,000 per person to as many people as you want each year? This allows you to share your wealth with family and friends in a tax-efficient manner. These gifts not only escape taxation but allow you to enjoy the satisfaction of providing your loved ones with an unexpected financial windfall during your life, making a lasting memory and deepening your relationship, instead of them receiving the money outright after you’re gone. Whether it's helping with educational expenses, medical expenses, or gifting them with $18,000 or less to pay for a dream vacation, or simply offering a helping hand, annual exclusion gifts and these memories will last well beyond your lifetime and will impact the legacy you leave behind. In Illinois, if you have more than $4 million at the time of your death, your estate will probably owe more than $300,000 in taxes.  When it comes to federal estate taxes, the sunset of the estate tax exemption is set to occur at the end of 2025. So, now is the time to make gifts to your loved ones if you have a taxable estate. Contact us to discuss your options, as there are far better ways to gift than an outright distribution to your loved ones.

9 | Use Up Your Lifetime Gift Tax Exemption

Use up your lifetime gift tax exemption: It's not just about securing your own financial future but also about ensuring your loved ones thrive after you’re gone. By leveraging your lifetime gift tax exemption, currently standing at $13.61 million per person in 2024, you can minimize estate taxes and provide a significant financial boost to your heirs during your lifetime. Whether it's funding education, helping with a down payment on a home, or simply offering financial support, using this exemption allows you to share your wealth and make a lasting impact on those you cherish most. The exemption is set to sunset at the end of 2025, so as an Illinois resident – if your household estate is greater than $4 million, including all of your assets, retirement accounts and life insurance policies, now is the time to plan. Contact us asap to get your affairs in order and your financial spring cleaning done in 2024.

10 | Allocate More Funds To The Generation Skipping Tax Exemption

As you plan for the future, it's essential to consider the next generation of your family. By allocating additional funds toward your generation-skipping transfer tax exemption (of up to $13.61 million in 2024), you provide a seamless transfer of assets to your grandchildren or future beneficiaries. This strategic move not only minimizes tax implications, but also lays the groundwork for creating generational wealth for your family for generations to come.

11 | Make an Extra Mortgage Payment

Your home is more than just a place to live—it’s also most likely you’re most valuable asset. Not to mention, that home ownership can offer some fantastic tax advantages. Something to consider is making an additional payment on your mortgage on an annual basis. For me personally, I like round numbers, so I round up my payment by $300-$400 per month to reduce the principal $3,600 - $4,800 per year. If you listen to the financial gurus, they’ll tell you to make an additional mortgage payment every year. By making an extra mortgage payment on your primary home loan every year, you can save exponentially over the long-term life of your mortgage and avoid paying a ton of interest over time. Not to mention, if any of your payment gets applied to interest, you will also be increasing your mortgage interest deduction on your tax return. Not only does this reduce the principal balance of your mortgage at a much faster rate, but it also saves your family a ton of money in unnecessary interest and accelerates your path to being debt free and owning your home outright. On top of that, you may also reduce your taxable income in 2024.

12 | Complete Repairs on Rental Property

If you are lucky (and smart) enough to own a rental property, investing in your rental property in 2024 by making repairs not only enhances its value, but also offers tax benefits. By completing repairs on your rental property, you can offset rental income on your tax return, but you can also increase the value of your property, while providing a better living environment for your tenants. It's a win-win situation that not only improves your property's profitability, but also strengthens your relationship with your renters.

13 | Create a Lifetime Asset Protection Trust

Planning for the unexpected is an act of love for your spouse and children, and when you know the right tools to use (like we do) you can make sure your family is provided for and protected for generations to come. One of my favorite ways to do this is using a Lifetime Asset Protection Trust. This tool allows you to protect the assets you leave for your children from any future financial trouble, like lawsuits, or divorces.

14 | Create Your Estate Plan

Finally, don't overlook the importance of estate planning when organizing your spring-cleaning list. By crossing this major item off your to do list in 2024, you can give your family and loved one’s benefits that will last for generations to come. By finalizing your Will, Revocable Trust, Powers of Attorney, and an Advance Medical Directive, you will ensure that your wishes are carried out and your loved ones are protected in the event of your incapacity or death. It's a vital step to secure your family’s future, design the legacy you deserve and provide peace of mind for you and your family. By checking this item of the list, it will allow you to focus on enjoying life's precious moments and stop worrying about the what ifs.  Just remember, selecting the right option and professional to assist you in creating these documents will make all the difference in guaranteeing that your plan will work for your family when they need it most. When done correctly, a proper estate plan is much more than a set of documents and should involve more than just a balance sheet of your assets, but instead a lifetime of wise decisions that will shape your life and legacy.

What Spring Cleaning Project Matters Most to Your Family & Future

April is almost over and as your spring-cleaning begins, don’t forget to prioritize getting your financial and estate planning affairs in order in 2024.  

As your Family, Wealth & Legacy Attorney, we know the value of planning for the future. More importantly, we know the importance of planning for the life you want today and intentionally designing the legacy you want to leave behind. Your memory will be defined by much more than a balance sheet and unlike the traditional estate planning firm, we educate our clients, give them the tools, and encourage them annually to add to their legacy plan for the rest of their life.  There’s so much more to wealth than money and that is why we go above and beyond to protect what truly matters most and will shape the memory of your life for generations to come.

 Schedule a complimentary 15-minute call to learn how we can help you create a Family, Wealth & Legacy Plan to get your affairs in order and plan in place in 2024.

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This article is a service of Family Wealth & Legacy Legal Solutions (FWLLS). At FWLLS, we do not just draft documents; we ensure you make educated, informed and empowered decisions for yourself and the people you love. That's why we offer a Family Wealth & Legacy Strategy Session™, during which you will get educated and begin to prepare to avoid life’s most common legal problems and get a plan in place to make the best possible choices for the people you love. You can begin by calling our office today to schedule a Family Wealth & Legacy Strategy Session and mention this article to find out how to get this $750 session at a significantly discounted rate, or even for free.