Avoiding Estate Planning Pitfalls: A Holiday Guide to Minimizing Taxes and Securing Your Legacy in Missouri

The holiday season is a time for reflection, generosity, and planning for the future. As the year comes to a close, it’s an excellent opportunity to revisit your estate plan and ensure your financial legacy is secure. For families in Missouri, understanding local laws and avoiding common mistakes is especially critical.

At Northland Elder Law, we specialize in helping individuals and families in the Kansas City area navigate estate planning and probate with confidence. In this guide, we’ll share practical tips to minimize taxes on your estate while highlighting common pitfalls to avoid as you plan for the New Year.

Take Advantage of Year-End Gifting

The holidays are a season of giving, making it the perfect time to utilize the annual gift tax exclusion. In 2024, Missouri residents can gift up to $18,000 per recipient (said amount to increase to $19,000 in 2025) without triggering a requirement to file a federal gift tax return. This strategy not only spreads joy but also reduces your taxable estate.

Pro Tip: Gifting may result in consequences for individuals who seek governmental assistance with paying for long-term care. Specifically, under MO HealthNet’s “vendor” benefit program, an individual can obtain monetary assistance with paying for nursing home care. However, there is a 60-month look-back period from the date of application for said benefits and the State will impose a penalty for gifts made within that period. Since the penalty does not begin until the individual is otherwise eligible for services, it is important to consider how gifting can impact your future. Our office can assist you and your loved ones will further guidance and information about this topic to avoid unintended consequences of gifting.

Utilize Trusts to Protect Your Assets

Trusts are an invaluable tool for ensuring your wishes are honored. Whether you establish a revocable living trust or an irrevocable trust, these tools can provide more control and flexibility than a traditional will.

Think of a trust as a carefully prepared holiday gift—it keeps everything secure and ensures it reaches the right person at the right time. For Missouri residents, a trust can also help avoid probate court, saving time and money for your heirs.

Avoid Common Estate Planning Pitfalls

Even with the best intentions, mistakes can complicate your estate plan. Here are three to watch out for:

• Failing to Update Your Plan: Major life events such as marriages, divorces, or new additions to the family require updates to your estate plan. Use the New Year as a reminder to review your documents.

• Overlooking Missouri’s State Laws: While Missouri does not have an inheritance tax, federal estate tax laws may still apply.

• Relying Solely on Beneficiary Designations: While beneficiary designations are important, they are not a substitute for a comprehensive estate plan that accounts for all your assets and wishes.

Incorporate Charitable Giving Into Your Plan

The season of giving is an ideal time to consider charitable contributions. Not only can donations to a favorite cause reduce your taxable estate, but they also allow you to leave a meaningful legacy.

New Year’s Tip: Work with an experienced attorney, like those at Northland Elder Law, to create a giving strategy that aligns with your estate plan and benefits your community in Missouri.

Wrapping Up 🎁

As you celebrate the holidays and look toward the New Year, take time to revisit your estate plan. With guidance from Northland Elder Law, you can avoid common pitfalls and secure your legacy for the ones you love.

Located in the Kansas City area, Northland Elder Law is dedicated to helping Missouri families navigate estate planning and probate with clarity and confidence. Contact us today to schedule a consultation and make 2025 the year of peace of mind for you and your family.