The main priority for many people who are entering their golden years is to create an estate plan, either through a will or a trust, which takes care of their friends, family, and loved ones. If you have already prepared for what will happen to your possessions after you pass away, you have probably decided which beneficiaries and heirs will get what. Have considered gifting away some of your assets right now, while you’re still alive, though?
Gifting Has Many Benefits
Reducing estate taxes: If you have a sizeable estate, you can reduce or otherwise eliminate estate taxes by carefully planning out gifts to loved ones during your lifetime. If your estate value is near or exceeds the exemption amount ($5.34 million circa 2015), you should seriously consider gifting part of your estate away. Additionally, you can give away up to $14,000 (2015) to any individual without triggering tax implications. Spread your wealth amongst your children and grandchildren over the course of a few years and you might be able to significantly reduce your estate value without losing much to taxes.
Giving is receiving: Gifting part of your estate during your lifetime gives you the chance to see the benefits your generosity firsthand. The difference your gifts can make for your loved ones might be astronomical, and it is selling it short to say that you will feel incredible satisfaction and enjoyment. Some of your property can be used towards helping your children or grandchildren start a family, buy a home, grow a business, launch a dream career, and so on.
Help when it’s most needed: In the event a loved one needs sudden funding for medical treatment or tuition, you can gift an unlimited amount from your estate without triggering any tax consequences whatsoever. The federal government permits this kind of generosity but only if you can prove that the funds were given directly to an educational or medical organization.
Seeking Professional Help
Before giving gifts to your loved ones, it is important to discuss your intentions with an estate planning professional to ensure you avoid triggering any unnecessary tax penalties. An attorney can help you figure out the best way to structure your gift to benefit your loved ones the most while continuing to preserve their inheritances in the future. Oftentimes, for tax purposes, you might even want to consider giving appreciating assets instead of cash, as the future appreciation value of those assets could increase.
If you are considering gifting part of your estate, contact Hannah Sargent, Alameda County probate and estate planning attorney. Our firm offers free case evaluations to get you started on the right track without any pressure, so call (510) 344-2599 today.