While your thoughts are trending toward holiday parties, gifts, and seasonal frivolity with family and friends, I recommend you take a moment to look at your financial life and take care of a few things before year-end.

Let’s start with estate planning. Check your beneficiary designations. Insurance policies, retirement accounts, and some investment accounts pass to your heirs outside of your Will. If you’ve had any family changes during the year — marriage, divorce, or the birth of a child — you may need to update your beneficiary designations on these accounts.

Since you’ll likely be surrounded by family and close friends, consider creating or revising any powers of attorney you may have in place. These documents allow others to make decisions for you regarding healthcare choices or financial transactions should you become incapacitated. Also, ask your parents if they have these documents in place. While no one wants to dwell on their mortality during the holidays, having these legal documents in place can bring peace of mind knowing that you’re prepared for emergencies.

If you or anyone in your family has a safe deposit box, take the time to visit it, take inventory of what it contains, and make sure other family members have access to the key. If a bank has incomplete or incorrect contact information, box owners are delinquent in annual fees, or if the bank branch is closing, boxes can be drilled open and the contents damaged or lost. Furthermore, if your Will or powers of attorney are sealed away in a secret location, they do your heirs no good should something happen.

Let’s move on to your taxes, because once the year closes, there is little you can do to improve your situation. You may consider tax-loss harvesting by selling any losing investments to offset any capital gains tax liabilities you may have. If you know you will have a Georgia state tax obligation and you need to save for education costs, you may want to contribute to a 529 Plan. Georgia currently offers a state income tax deduction for up to $4,000 for joint filers per beneficiary.

Taxpayers should also take the time to estimate their state tax liability. Georgia filers are required to follow the same selection used on their federal returns regarding claiming the standard deduction or choosing to itemize deductions. However, Georgia’s standard deduction is only $6,000 for married filers. It may benefit you to accelerate some deductions into 2019 so you can itemize on both your federal and state returns.

Finally, investors should take stock of their portfolio. Because of sector or asset class outperformance, your allocation may be skewed, creating unnecessary risk in your portfolio. Rebalancing at year-end may help you lock in your gains and put you on the right track for next year.

If you’re dollar-cost averaging money into taxable accounts, be aware of when you purchase shares of mutual funds, regarding dividend payments and capital gain distribution dates. All investors who own shares as of the close of business on the record date are entitled to receive distributions, so this could create an unexpected tax liability.

These are just a few of the financial tasks you may want to address before year-end. Consult a financial adviser or CPA for more detailed recommendations for your specific situation.

William G. Lako, Jr., CFP®, is an Executive in Residence at Kennesaw State University’s Coles College of Business and a principal at Henssler Financial and a co-host on Atlanta’s longest running, most respected financial talk radio show “Money Talks” airing Saturdays at 10 a.m. on AM 920 The Answer. Mr. Lako is a CERTIFIED FINANCIAL PLANNER™ professional.


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