7 Financial Decisions to Review Before Year-End

7 Financial Decisions Worth Reviewing Before Year-End Start with a full-year tax projection so you can see how income, investments,

What Happens When You Inherit a House in California?

What Happens When You Inherit a House in California? First, figure out how the house legally passes to you. It

What to Do When Your Income Changes

What to Do When Your Income Changes If your income changes, start by figuring out whether this is a temporary

7 Financial Decisions Worth Reviewing Before Year-End

Start with a full-year tax projection so you can see how income, investments, deductions, and potential planning decisions interact.
Review retirement contributions, charitable giving, employer benefits, upcoming cash needs, and estate documents while there is still time to make changes.
Involve your financial planner, CPA, and estate planning attorney early when one decision could affect several parts of your financial life.

Why Should You Start Year-End Financial Planning in October?

By December, your CPA may be buried, your estate attorney may be booked, your company’s benefit elections may be closed, your financial planner is already buried, and the charitable gift you thought would take two days may require two weeks.

October gives you something December rarely does: Options.

Year-end financial planning doesn’t mean trying to find clever ways to save taxes before the ball drops in Times Square. Instead, you need to look at what changed this year, what you expect next year, and which decisions still have a deadline attached to them.

Selling an investment may change your tax projection. A large charitable gift may influence which investment you sell or donate. A Roth conversion could affect your tax bracket, Medicare premiums, and available cash. An estate planning decision may require an appraisal, legal documents, and a conversation with the family.

Those pieces take time to coordinate.

I would much rather see the whole picture in October than receive seven unrelated questions during the final week of December. By then, the question often changes from “What makes the most sense?” to “What can we still get done?”

1. What Will Your Full-Year Tax Picture Look Like?

Before making a year-end tax decision, you need a reasonable estimate of your total income and tax exposure.

Start with salary, bonuses, business income, investment income, and any consulting work. Add realized capital gains, real estate transactions, stock option exercises, RSU vesting, and other income that may not show up in an ordinary paycheck. Then look at withholding, estimated payments, deductions, and charitable contributions.

If this year looked different from last year, your old tax assumptions may no longer be useful. Maybe you received a larger bonus, sold a property, exercised stock options, or had an unusually profitable business year. Perhaps your income dropped because you changed jobs, took a sabbatical, or retired.

Income changes require a different approach, whether the change moves your income up or down.

A tax return tells you what already happened. A tax projection gives you time to make decisions.

Once your planner and CPA have a shared set of numbers, you can evaluate whether it makes sense to realize gains, complete a Roth conversion, increase retirement contributions, make a larger charitable gift, or adjust an estimated payment. Recent tax law changes taking effect in 2026 make that projection even more important.

2. Does Your Investment Portfolio Still Fit the Job It Needs to Do?

A year-end investment review should go beyond asking whether the portfolio made money.

I would want to know whether market movements changed your intended allocation, whether one company or industry now represents too much of your wealth, and whether the portfolio still matches what you need the money to do.

This is especially important for executives holding employer stock and real estate investors with a large share of their net worth tied to one market. A holding can be a good investment and still occupy too much of your financial life.

Taxes belong in this conversation too. Look at the capital gains and losses you have already realized. There may be opportunities to sell investments at a loss and offset certain gains, but tax-loss harvesting should support the investment plan rather than drive it.

You also need to consider the IRS wash-sale rules before repurchasing the same or a substantially identical investment. Those rules can become particularly messy when trades occur across multiple brokerage accounts, retirement accounts, or a spouse’s account.

Finally, check what you will need from the portfolio over the next few years. Money intended for tuition next fall, a home purchase, or the first years of retirement has a different job from money that can remain invested for another decade.

3. Are You Using the Retirement Savings Opportunities Available to You?

Review your retirement contributions before the final few payroll cycles of the year.

For 2026, employees can generally contribute up to $24,500 to a 401(k), 403(b), or governmental 457 plan. The general catch-up contribution for people aged 50 and older is $8,000, while people ages 60 through 63 may qualify for a higher $11,250 catch-up contribution.

There is also a new wrinkle for some higher-income employees. Beginning in 2026, employees whose prior-year wages from the employer exceeded $150,000 generally must make catch-up contributions on a Roth basis if the plan allows catch-up contributions.

I would review the following areas.

Year-to-date employee contributions
Employer matching contributions
Catch-up eligibility
After-tax contributions and in-plan Roth conversions
IRA or backdoor Roth planning
SEP IRA, solo 401(k), or other business-owner plans
Potential Roth conversions from existing retirement accounts

Maximizing every available account is not automatically the right answer. You still need enough cash for taxes, family expenses, and near-term goals. It may also make sense to build different sources of taxable, tax-deferred, and tax-free retirement income rather than sending every available dollar to the same type of account.

4. Could Your Charitable Giving Be More Intentional This Year?

Start with what you want your giving to accomplish. Which organizations matter to you? How much do you want to give? Would you still make the gift if there were no tax deduction?

Once those questions are answered, you can decide how to fund the gift.

Writing a check may be simple, but it may not be the most efficient choice if you own investments that have appreciated significantly. Donating eligible appreciated securities directly may allow you to support the charity without selling the investment first and realizing the gain.

Don’t forget about qualified charitable donations from your IRAs. If you’re over 70.5 years old, you can make a donation directly from your IRA without having to pay taxes on the withdrawal. These donations can be used to satisfy required minimum distributions, and the charity ultimately gets more money because they won’t have to pay taxes on that donation. Win-win.

Some families also group several years of donations into one tax year or contribute to a donor-advised fund. With a donor-advised fund, the sponsoring organization takes legal control of the contribution, while you retain advisory privileges over how grants are distributed to charities.

That can be useful during an unusually high-income year or when you know how much you want to give but have not chosen every organization yet.

These strategies require lead time. A charity may need to verify its brokerage instructions. A donor-advised fund must be established and funded. Privately held assets may require additional documentation or a qualified appraisal.

December 29 is a poor day to begin that process.

5. Do Your Employer Benefits and Equity Compensation Need Attention?

Some of the least flexible year-end decisions arrive through your employer.

Open enrollment is the obvious example. Review health coverage, HSA or flexible spending account elections, disability insurance, life insurance, and dependent care benefits. If you and your spouse both have workplace coverage, look at the options together before making separate elections.

I have seen couples pay for overlapping benefits while leaving a useful option untouched because each person assumed the other had handled it.

Executives may have additional decisions involving deferred compensation, employee stock purchase plans, RSUs, and stock options. Review what vested this year, what may vest next year, and whether any option exercise windows are approaching.

An option exercise can affect your taxes, cash flow, and exposure to employer stock at the same time. A deferred compensation election may influence income years into the future and may be difficult or impossible to change later.

6. Has Your Estate Plan Kept Up With Your Actual Life?

An estate plan can still be legally valid while doing a poor job of reflecting your current wishes.

Review your will, revocable trust, financial power of attorney, health care directive, and beneficiary designations. Confirm that the people named as executor, trustee, guardian, and agent are still the people you want in those roles.

Then look at what has changed.

Did you get married or divorced? Was a child or grandchild born? Did someone named in the documents die? Did you buy property, sell a business, open new accounts, move to another state, or begin providing significant financial support to a family member?

Larger lifetime gifts may require even more coordination. For 2026, the annual federal gift tax exclusion is $19,000 per recipient. Giving more doesn’t necessarily mean you will owe gift tax, but it may create a reporting requirement and use part of your lifetime exemption.

The number alone should not decide how much you give. I would first want to know how the gift affects your own security, what you want it to accomplish, and whether everyone understands what the money represents.

7. What Will Your Family Need Cash for Over the Next Year?

Before increasing retirement contributions, investing extra cash, or making a large gift, look at what the next twelve to eighteen months may require.

That could include tax payments, tuition, a home purchase, renovations, business funding, family support, travel, insurance premiums, or the first year of retirement.

I would rather know in October that you need $200,000 next June than discover it after we have invested the cash, exercised stock options, and funded a large charitable gift.

Add up the known expenses, leave room for the less predictable ones, and decide where the money should come from. That may mean holding more cash, directing an upcoming bonus toward the goal, or identifying investments that can be sold thoughtfully.

If selling investments would create an unwanted tax bill, there may be other ways to access cash, although borrowing against assets introduces its own costs and risks.

Liquidity is what makes the rest of the plan workable. A strategy can look impressive on paper and still be a bad fit if it leaves your family scrambling for cash six months later.

Give the Important Decisions Enough Time

You may review these seven areas and decide that only two require action this year. That is a perfectly good outcome.

You don’t need seven new financial strategies before December 31. You need a clear view of what changed, what’s coming next, and which decisions still have a deadline attached to them.

If your taxes, investments, benefits, charitable plans, and estate decisions have started to feel like separate conversations, Lanning Financial can help you bring them into one financial picture.

Start with our brief questionnaire to tell us a little about your situation and see whether working together may be a good fit.

Jessica Lanning, CFP®

Email: [email protected]
Phone: (415) 354-5699
LinkedIn: linkedin.com/in/jessicalanning
YouTube Channel: Lanning Financial on YouTube

Lanning Financial Inc. is a registered investment adviser. Information presented is for educational purposes only and does not intend to make an offer or solicitation for the sale or purchase of any specific securities, investments, or investment strategies. Investments involve risk and unless otherwise stated, are not guaranteed. Be sure to first consult with a qualified financial adviser and/or tax professional before implementing any strategy discussed herein. Past performance is not indicative of future performance.

What Happens When You Inherit a House in California?

First, figure out how the house legally passes to you. It may transfer through a trust, joint ownership, a transfer-on-death deed, or probate.
Expect to revisit the property tax bill. California’s Proposition 19 rules can trigger reassessment, even when a house passes from parent to child.
Get a date-of-death value for the property. Your tax basis will generally be tied to that value, which can make a big difference if you sell.

Will Inheriting Property Be a Boon or a Bust?

You may have known for years that you were going to inherit a property when someone died. That property might have generated income that paid for your parent’s long-term care expenses or provided income to someone who had little other resources.

You might be excited about the prospect of being the beneficiary of that asset and its income. Or maybe you’re excited to be able to move into this house and call it your own. This might be the only way you can afford to own a home.

Before you get too excited, there’s much to consider when inheriting a piece of real estate. The rules that applied to the person who gave you this home might not apply to you. Going into this acquisition with eyes wide open will serve you well.

How Does an Inherited House Pass to You in California?

An inherited house doesn’t always become yours the moment someone dies, no matter what the dead person said before dying. How it transfers depends on the deed, the estate plan, and how the property was owned.

This is the first thing you will have to sort out before even considering selling, refinancing, or moving in.

A home held in a living trust may pass through the trust. Property owned in joint tenancy can pass to the surviving owner. Someone might have the right to live in it for the rest of their life. The house may need to go through probate.

Be careful not to jump to the conclusion that being named in a will or trust gives you immediate control over the property. It may not. Before anyone calls a Realtor or starts making plans for the house, confirm who actually has authority to act.

What Happens to Property Taxes When You Inherit a California Home?

This might be your biggest (and nastiest) surprise. The property taxes on this property may change after you inherit it. Proposition 19 narrowed the circumstances in which children can keep a parent’s existing property tax assessment, and you’ll want to understand how it works.

Proposition 19 Changed the Parent-to-Child Rules

A lot of people still assume that if Mom paid property taxes based on a decades-old purchase price, her children will simply keep paying roughly the same amount. That is no longer a safe assumption.

California voters passed Proposition 19, which went into effect on February 16th, 2021. That changed the property tax rules for most people inheriting real estate.

For a parent-to-child transfer to qualify for the current family home exclusion, the home needed to have been the parent’s primary residence and within a year must become the primary residence of the person who inherited it. Otherwise, the whole property gets reassessed.

The numbers matter too. For qualifying transfers from February 16, 2025, through February 15, 2027, the indexed exclusion amount is $1,044,586. If the property’s market value exceeds the parent’s taxable value plus the applicable exclusion, that portion will be reassessed and the property taxes will likely increase.

That can change the economics of keeping the house.

A home that looked inexpensive to hold based on your parent’s old tax bill may look very different after reassessment. I would want that number before deciding the property is a keeper.

Will You Owe Capital Gains Tax on an Inherited House?

You may owe capital gains tax when you eventually sell, but you generally don’t inherit the previous owner’s original purchase price as your tax basis. Your basis is usually tied to the property’s fair market value at death.

The Step-Up in Basis Matters

Suppose your mother bought a Bay Area house for $300,000, and it is worth $1.5 million when she dies.

Your basis will generally be around the $1.5 million date-of-death value, subject to the applicable tax rules. If you sell soon afterward for about $1.5 million, there may be relatively little appreciation to tax.

This is why I would not skip the date-of-death appraisal just because no one plans to sell right away. Years later, reconstructing what a house was worth on a specific date can become a more difficult project.

There is another distinction worth keeping straight. Your Proposition 19 property tax assessment and your income tax basis are not the same calculation. People understandably mix them up, but they answer different tax questions.

Do You Pay Inheritance Tax on a House in California?

California doesn’t impose an inheritance tax on the person receiving the house. Receiving the property also generally doesn’t create income tax simply because you inherited it.

That sounds like the end of the tax conversation, but it’s not.

You can still face a higher property tax bill after the transfer, and you may have capital gains when you later sell. Larger estates can also have separate federal estate tax issues.

What Happens If the Inherited House Has a Mortgage?

The mortgage doesn’t disappear when the owner dies. Before making plans for the house, find out what is owed, who is servicing the loan, and what it costs to keep the property each month. Generally speaking, a lender will not call the mortgage due and require you to pay it off if you have inherited the property. No matter what, you need to keep paying the mortgage on time.

This is one of the more mundane parts of inheriting a house, but it can drive the decision.

Should You Keep, Rent, or Sell an Inherited House?

There is no automatic best choice. The right answer depends on the property’s real carrying costs, its tax treatment, your other assets, and whether you would choose to own this house if you were starting from scratch.

Know your numbers

You want to calculate the actual carrying costs, which include:

Mortgage payment
Property taxes
Homeowners insurance
HOA dues
Utilities
Routine maintenance
Repairs that have been deferred

A house can have $1 million of equity and still be uncomfortable to carry.

That’s easy to miss when everyone is focused on what the property is worth. If the estate takes time to settle, or siblings are still deciding what to do, somebody may be writing checks for months before there is a long-term plan.

Keeping the House

Here is the question I find most useful.

If you had inherited the same amount in cash instead, would you use it to buy this house today?

That doesn’t erase the emotional side of the decision. A family home is not just another line on a balance sheet. However, the question helps separate the house you remember from the asset you would be choosing to own now.

Look at the new property tax bill, maintenance, location, insurance, and how much of your net worth would end up concentrated in one property.

Renting the House

Renting out the house can sound attractive until you run the full numbers. If you plan to use a property manager, include that cost too.

Start with expected rent, then subtract property taxes, insurance, management, maintenance, vacancy, and the occasional large repair. A roof, sewer line, or HVAC replacement has a way of changing an elegant spreadsheet.

Also confirm the Proposition 19 consequences before assuming renting is the obvious compromise. Most rental properties are reassessed to full market value unless other provisions have been put in place to avoid this situation.

Selling the House

Selling may be the cleanest answer when the property doesn’t fit your life, requires more cash than you want to put into it, or leaves too much of your wealth tied to one piece of California real estate.

Sometimes people worry that selling means they are giving up something emotionally important. I would separate those two ideas. You can value what a home means to your family without deciding that you need to own it indefinitely.

What If You Inherit the House With Siblings?

When siblings inherit together, the math is often easier than the family dynamics. One person may want the house, another may want cash, and a third may be open to renting it.

Do not start with who “deserves” what. Start with a credible property value and a clear picture of the costs.

If one sibling wants to buy out the others, work through the valuation, financing, taxes, and ownership transfer before agreeing on a price over dinner.

The house may be a family asset, but the buyout is still a financial transaction. Treating it that way can make the family conversation easier.

What Should You Do First After Inheriting a California House?

Before choosing what to do with the house, get control of the facts. Confirm who owns it, what it is worth, what it costs to carry, and how the transfer affects the taxes.

I would start here:

Find the deed, trust, will, mortgage statement, insurance policy, and property tax bill.
Confirm who currently has authority to act for the property.
Get a reliable date-of-death valuation.
Find out whether the property will be reassessed under Proposition 19.
Calculate the real monthly and annual carrying costs.
Talk through the tax consequences with your CPA.
Review the keep, rent, and sell options in the context of the rest of your financial plan.

You don’t have to decide everything in the first few weeks. However, there is a difference between giving yourself time and putting off the financial homework.

If you’ve inherited a home in California and are not sure whether keeping it, renting it, or selling it makes the most sense, I can help you look at the numbers and how the property fits into the rest of your financial life. Sometimes getting clear on the tradeoffs is enough to make the next step much easier.

Jessica Lanning, CFP®

Email: [email protected]
Phone: (415) 354-5699
LinkedIn: linkedin.com/in/jessicalanning
YouTube Channel: Lanning Financial on YouTube

What to Do When Your Income Changes

If your income changes, start by figuring out whether this is a temporary disruption or a more permanent change so you can decide whether you need a short-term adjustment or a bigger reset.
Review your cash flow, benefits, savings, debt, and upcoming large expenses before making major financial decisions from a place of stress.
A short-term income drop usually doesn’t derail a long-term plan, but it may require pausing, delaying, or reshaping goals until the next chapter becomes clearer.

Your Income Changed. Now What?

Many people are asking some version of this question right now.

I’m making less money. I just took a lower-paying job. I’m out of work. I want to take six months away from work for a project, caregiving, or just to breathe. What does that mean for my financial plan? Am I still going to be okay?

First, breathe. And keep breathing.

An income change can feel scary, especially when you have been operating from a certain set of assumptions for a long time. But a lower-income period doesn’t automatically mean your plan is broken. Very often, it means the plan needs to be updated.

Recent Federal Reserve research found that 30% of adults had income that varied at least occasionally during the year, and 11% struggled to pay bills because their income varied. Job security was also top of mind, with 42% of adults saying they were worried about finding or keeping work.

So, if income feels less predictable right now, you are not imagining it, and you are not alone. The question is what to do next.

First, Figure Out What Kind of Income Change This Is

Not every income drop requires the same response.

A temporary income drop is one thing. Maybe you lost a job and expect to find another one. Maybe you are taking unpaid leave, your business slowed down for a few months, or you’re intentionally stepping away from work for a season.

A lower-paying but intentional change is another thing. The new job could pay less but give you more flexibility, less stress, more time with your family, or a better version of daily life.

A long-term or permanent income loss is different. Disability, the death of a spouse, a lasting business decline, or a career change that permanently lowers income can have a much bigger impact.

Before you start making cuts or second-guessing everything, name the situation honestly. Is this a chapter, a transition, or a new long-term reality?

The answer shapes the plan.

Short-Term Income Loss Usually Calls for Recalibration, Not Panic

In my experience, a short-term job loss or temporary income decrease is usually not fatal to a long-term financial plan.

You may need to pause a remodel, make the current car work for another few years, rethink the big vacation you were planning, or slow down extra savings temporarily while you get through the transition.

That’s not the same as giving those things up forever.

You are often just moving them to a different year, changing the scope, or giving yourself time to see what happens next.

There is also some data to support the idea that job loss doesn’t always become a permanent setback. The Bureau of Labor Statistics reported that among long-tenured displaced workers who were reemployed full time, 62% had earnings that were as much as or greater than what they earned in their lost job.

Not everyone lands quickly or at the same income. Some people need a deeper reset. But it’s a useful reminder that a disruption isn’t always the end of the story.

Look at What Actually Needs to Change

When income drops, the first instinct is often to look at everything at once. That can get overwhelming very quickly.

Instead, start with the decisions in front of you.

Do you have a major purchase coming up? A remodel? A car? Tuition? Travel? A move? Are you planning to support an adult child or aging parent? Are you counting on income that may not arrive when you expected?

Those are the places to look first.

Some decisions can wait or you can adjust them. Others may still make sense, but not right now.

This is where financial planning can create relief. You don’t have to decide that the remodel is gone forever. You might decide it happens two years from now instead of this year. You don’t have to decide that the vacation is irresponsible. You might decide it needs to look different this time.

The goal is to separate what matters from what is simply scheduled.

Revisit Cash Flow Without Turning It Into Punishment

When your income changes, you need to look at cash flow. But I don’t think that it should feel like punishment.

This is not the moment to beat up on yourself for earning less. Instead, you want to relook at your spending and make sure it aligns with your values.

Start with what’s coming in now. Then look at what’s going out. Separate fixed expenses from flexible ones. Notice what is essential, what is discretionary, and what can pause for a period of time.

Rather than tell yourself a story about how awful this is, tell yourself a story about how you know how to do hard things, that you are resilient, that you are figuring it out, that this is not permanent, and that ultimately you are doing the best thing for you for today and for 10 years from now.

Also look at the benefits. If your job changed, did your health insurance change? Did retirement contributions stop? Did stock compensation, bonuses, or employer-paid benefits shift? These details can matter as much as the salary number.

Then look at savings. How long can your cash reserves support this chapter? Do you need to use them? If so, how much and for how long?

Use the Pause to Recheck Your Priorities

Sometimes an income change does more than shift the numbers. It changes the conversation.

We can get on the hamster wheel at work and just keep going. More income, more spending, more commitments, more expectations. Then something interrupts the pattern, and suddenly you have a chance to ask better questions:

Do I actually want the kitchen remodel right now?
Do I want the higher-paying job if it means I never see my kids?
Am I spending in ways that have heart and meaning for me, or am I just keeping up with what I thought I was supposed to do?

A lower income is not a failure. Sometimes it comes with something valuable, like more time, less stress, more creative freedom, or a life that feels more aligned.

Run the Numbers Before You Assume You Are Off Track

This is where a financial plan becomes really helpful.

If you are already working with a financial planner, that person should be able to update your plan with the new income assumption and show you the impact. What happens if you make less for six months? What happens if the lower income lasts two years? What happens if you save less temporarily but restart later?

There are answers to these questions.

Sometimes clients come in worried that everything has changed, and when we run the numbers, the answer is much more manageable than they feared. Maybe retirement still works, but the big goal needs to move back a little. Or one choice needs to change, but the whole plan does not.

Seeing the impact in your own numbers can create a lot of relief.

It also helps couples and families talk about the situation with less blame and more context. When everyone is guessing, tension can rise quickly. When the numbers are visible, the conversation becomes more grounded.

When an Income Change Needs a Bigger Plan

There are times when an income change deserves more than a temporary adjustment.

If the lower income is likely to be permanent, the plan needs to reflect that. If the change involves disability, the death of a spouse, divorce, extended unemployment, loss of benefits, or ongoing family support obligations, it is worth taking a deeper look.

The same is true if the income change is creating conflict at home. Money stress can bring out very different fears in different people. One person may want to cut everything immediately. Another may want to keep life feeling normal for as long as possible.

Neither reaction is unusual, but it helps to have a shared view of the facts.

A bigger plan may include adjusting spending, changing savings targets, revisiting insurance, rethinking retirement timing, evaluating debt, or deciding which goals still fit the life you want now.

This Is a Chapter, Not the Whole Story

An income drop can feel unsettling because it challenges the plan you thought you were living inside. But a change in income doesn’t automatically mean you are off track.

Sometimes it means you need to pause. Other times it means you need to delay a few things or redefine what success looks like in this season of life.

When you can look at the numbers, understand the tradeoffs, and make decisions from clarity instead of fear, the situation usually feels much more manageable.

If your income has changed and you want help understanding what it means for your financial plan, I invite you to start with my short questionnaire. It is a simple way to share what has shifted and see whether working together could help you move forward with more clarity and confidence.

Jessica Lanning, CFP®

Email: [email protected]
Phone: (415) 354-5699
LinkedIn: linkedin.com/in/jessicalanning
YouTube Channel: Lanning Financial on YouTube