Year-end questions to ask, changes to watch, strategies to consider

A woman advisor showing a digital tablet to a man sitting on a leather couch.

Planning considerations for tax, liquidity, charitable, and estate planning strategies

Photo of Robert G. Petix Jr.
Robert G. Petix Jr.
Senior Wealth Planning Strategist
Wells Fargo Wealth & Investment Management, Wells Fargo Bank, N.A.

Alfred Lord Tennyson famously wrote, “In the spring, a young man’s fancy turns to love.” In the world of estate planning, a less poetic but apt saying may be, “In the fall, a family’s thoughts turn to taxes and planning.” As you prepare for year-end tax and estate planning strategies, you may be wondering what steps to take now. While answers differ from family to family, here are a few steps to consider.

Host a meeting that includes all of your top advisors

The fourth quarter can be a good time to bring your attorney, accountant, and financial advisors together to help align your situation and objectives. Below is a checklist of things to consider discussing with your legal, tax, and financial advisors for this tax year and next. The sections that follow provide more context for your planning discussions.

  • Is tax-loss harvesting recommended to offset gains realized during the year?
  • Have you made your annual exclusion gifts?
  • Are you making any “ed/med” gifts for education and medical payments (including contributions to 529 plans) that may meet requirements for gift tax exclusion?
  • Do you have leftover funds in 529 plans that meet the criteria to roll them over into a Roth IRA for the beneficiary when 2024 rule changes as a result of the SECURE 2.0 Act go into effect?
  • Have you earmarked charitable gifting for the year?
  • Have you reviewed beneficiary designations for retirement plan assets as well as any life insurance policies and annuities to make sure they reflect your current plans?
  • What strategies may help minimize income taxes for each state that taxes your income?
  • What is your plan for potential income and wealth transfer tax changes?

Please consider the investment objectives, risks, charges and expenses carefully before investing in a 529 savings plan. The official statement, which contains this and other information, can be obtained by calling your financial advisor. Read it carefully before you invest.

Begin planning for potential tax reform

For more than two years, many pundits have warned that significant changes to the Internal Revenue Code were likely and that major tax reforms were inevitable. Many individuals have experienced “tax-reform fatigue” waiting to see when the predicted sweeping changes will occur — if they do.

Potential changes to estate/gift exclusion amounts

On the wealth transfer tax side, over the past few years, high-net-worth individuals have considered taking advantage of higher estate/gift tax exclusion and generation-skipping transfer (GST) tax exemption amounts before they are subject to a cut at the beginning of 2026.

Whether you acted or opted to wait, now is a good time to review potential gifting strategies with your advisors to determine whether your plans may be hampered by estate taxes, either at today’s levels or if changes do come. Implementing a proactive, multiyear gifting plan could help reduce your eventual transfer tax exposure. The year 2026 will arrive sooner than you think.

Potential income tax increases

Many observers expect that income tax rates will increase in the coming years. Your tax advisors can help you review your options, such as whether it makes sense to do a Roth conversion of your Traditional IRA or even to accelerate rather than postpone recognition of income. A review of your specific financial situation might reveal tax savings opportunities.

Potential for increased federal tax audits

Under the Inflation Reduction Act, the IRS is working to create specialized teams to review complex structures and identify areas of noncompliance. Work with your tax advisors now to review recommended tax strategies to determine whether they are worthwhile; if so, make sure that such planning is implemented properly.

Review liquidity, charitable, and estate planning strategies

With an increasing uncertainty about the direction of the markets and the economy generally, plus the current rising interest rate environment, you may want to optimize your strategies currently in place. Talk to your legal, tax, banking, and financial advisors to weigh your options.

In uncertain times, having access to sufficient liquidity can be critical when needs arise for quick access to cash. To enhance availability liquidity, many clients have asked about implementing a securities-based lending strategy, which may be preferable to selling securities in a down market. Consult with your Wells Fargo Advisors financial advisor about potential tactics.

A review of cash return optimization strategies also might be in order. Those who have had recent liquidity events may not be in a rush to put that cash to work immediately, or they may have a large tax bill due next year. Talk to your advisors to determine potential strategies, such as short-term asset management, that may meet your investment objectives, risk tolerance, and liquidity needs.

This is also a good time to consider charitable planning strategies. Many philanthropically inclined families have established a private foundation or put money into a donor-advised fund. In either case, year-end offers opportunities to make large transfers to these entities, which are income tax deductible for the current year, while distributions can be made to charities in future years.

If interest rates rise, certain estate planning strategies also may make more sense now than perhaps they did in recent years. In addition to the charitable strategies mentioned above, talk to your advisors to learn about possible tactics that can be more advantageous when interest rates are higher, such as qualified personal residence trusts, which allow parents to convey a personal residence to children at a reduced gift tax cost.

Share plans as a family

One way for families to share financial strategies and concerns is to have regular family meetings; children returning home for the holidays can offer an opportunity to have such meetings. Discussing plans for annual charitable contributions gives a family the opportunity to reflect on their goals and values and define their legacy. Other topics may include the family’s closely-held business, financial and nonfinancial concerns, and potential education or volunteer opportunities.


Wells Fargo Wealth & Investment Management (WIM) is a division within Wells Fargo & Company. WIM provides financial products and services through various bank and brokerage affiliates of Wells Fargo & Company.

Wells Fargo & Company and its affiliates do not provide tax or legal advice. This communication cannot be relied upon to avoid tax penalties. Please consult your tax and legal advisors to determine how this information may apply to your own situation. Whether any planned tax result is realized by you depends on the specific facts of your own situation at the time your tax return is filed.

Trust services available through banking and trust affiliates of Wells Fargo Advisors. Any estate plan should be reviewed by an attorney who specializes in estate planning and is licensed to practice law in your state.

All investing involves risks including the possible loss of principal.

Wells Fargo Advisors (WFA) and its Financial Advisors have a financial incentive to recommend the use of securities-based lending products (SBLs) rather than the sale of securities to meet client liquidity needs. Financial Advisors will receive compensation on Priority Credit Line (PCL) and other non-purpose SBL from Wells Fargo Bank. Your Financial Advisor’s compensation is based on the outstanding debit balance in your account. In addition, your Financial Advisor’s compensation will be reduced if your interest rate is discounted below a certain level. This creates an incentive for Financial Advisors to recommend PCL and other SBL products, as well as an incentive to encourage you to maintain a larger debit balance and to discourage interest rate discounts below a certain level. The interest you pay for the loan is separate from, and in addition to, other fees you may pay related to the investments used to secure the loan, such as ongoing investment advisory fees (wrap fees) and fees for investments such as mutual funds and ETFs for which WFA and/or our affiliates receive administrative or management fees or other compensation. Specifically, WFA benefits if you draw down on your loan to meet liquidity needs rather than sell securities or other investments, which would reduce our compensation. When assets are liquidated pursuant to a house call or demands for repayment, WFA and your Financial Advisor also will benefit if assets that do not have ongoing fees (such as securities in brokerage accounts) are liquidated prior to, or instead of, assets that provide additional fees or revenues to us (such as assets in an investment advisory account). Further, different types of securities have higher release rates than others, which can create a financial incentive for your Financial Advisor to recommend products, or manage the account, in order to maximize the amount of the loan.

Priority Credit Line is offered by Wells Fargo Advisors and lending and margin accounts are carried by Wells Fargo Clearing Services, LLC.

Donor Advised Fund donations are irrevocable charitable gifts. The sponsoring organizations maintaining the fund have ultimate control over how the assets in the fund accounts are invested and distributed. Donor Advised Funds donors do not receive investment returns. The amount ultimately available to the Donor to make grant recommendations may be more or less than the Donor contributions to the Donor Advised Fund. While annual giving is encouraged, the Donor Advised Fund should be viewed as a long-term philanthropic program. Tax benefits depend upon your individual circumstances. You should consult your Tax Advisor. While the operations of the Donor Advised Fund and Pooled Income Funds are regulated by the Internal Revenue Service, they are not guaranteed or insured by the United States or any of its agencies or instrumentalities. Contributions are not insured by the FDIC and are not deposits or other obligations of, or guaranteed by, any depository institution. Donor Advised Funds are not registered under federal securities laws, pursuant to exemptions for charitable organizations.