The Value of Gifts to Estate Planning
March 30, 2010 By Law Offices of Keith M. Dysart
Gifts offer an important tool for Estate Planners to avoid federal estate taxes. However if gifts do not take into account the special circumstances of the giver and recipient it may create more harm than help.
Making sure your estate is not subject to federal estate taxes is a primary goal in estate planning. Gifts are a valuable tool to ensure your estate does not exceed the minimum amounts exempt from estate taxes. However use of gifts without careful planning may create additional problems.
Even though gifts may be beneficial it is important to understand the potential pitfalls. A few possible issues to watch for may include:
Gift may triggering other taxes
Gift may alter recipient's status for current support
Loss of property to you
Using gifts to avoid estate taxes may have other tax implications. It is important to make sure your gift falls within one of the exceptions to the federal gift tax. Also it is important to understand giving a gift that has appreciated in value may leave the recipient paying capital gains taxes. If the purpose of your gift is to avoid taxes then it is important to look at the big picture.
Another concern to understand is how a gift can affect the recipients eligibility for financial and medical assistance. A gift may cause a students to lose financial aid, a person with special needs to lose financial and medical assistance, or a person classified as low income to lose benefits such as Medicare. A gift may be given with the best intentions, but without proper planning it may actually cause more harm than help.
Lastly I would urge you to understand the affect giving a gift may have on you. You may be giving away property that ensures your financial security. In addition you will surrender control of property that may have sentimental value. A gift to a child may seem natural way top honor the sentimental value, but there is no guarantee the property will not be sold or re-gifted later. It is important to understand when you give a gift you are giving up control of the property.
This article is meant only to provide information and is not intended as legal advice. If you have questions concerning your particular case you should make an appointment to talk to an attorney about your options.
ABOUT THE AUTHOR: Keith Dysart
We are a Family Law Office serving the people of Santa Cruz County. As an attorney I believe each case is as unique as the relationship and family involved. I limit my practice to family law and I strive to understand your circumstances and develop an approach suited for your case.
Copyright Law Offices of Keith M. Dysart
More information about Law Offices of Keith M. Dysart
Disclaimer: While every effort has been made to ensure the accuracy of this publication, it is not intended to provide legal advice as individual situations will differ and should be discussed with an expert and/or lawyer. For specific technical or legal advice on the information provided and related topics, please contact the author.
Even though gifts may be beneficial it is important to understand the potential pitfalls. A few possible issues to watch for may include:
Gift may triggering other taxes
Gift may alter recipient's status for current support
Loss of property to you
Using gifts to avoid estate taxes may have other tax implications. It is important to make sure your gift falls within one of the exceptions to the federal gift tax. Also it is important to understand giving a gift that has appreciated in value may leave the recipient paying capital gains taxes. If the purpose of your gift is to avoid taxes then it is important to look at the big picture.
Another concern to understand is how a gift can affect the recipients eligibility for financial and medical assistance. A gift may cause a students to lose financial aid, a person with special needs to lose financial and medical assistance, or a person classified as low income to lose benefits such as Medicare. A gift may be given with the best intentions, but without proper planning it may actually cause more harm than help.
Lastly I would urge you to understand the affect giving a gift may have on you. You may be giving away property that ensures your financial security. In addition you will surrender control of property that may have sentimental value. A gift to a child may seem natural way top honor the sentimental value, but there is no guarantee the property will not be sold or re-gifted later. It is important to understand when you give a gift you are giving up control of the property.
This article is meant only to provide information and is not intended as legal advice. If you have questions concerning your particular case you should make an appointment to talk to an attorney about your options.
ABOUT THE AUTHOR: Keith Dysart
We are a Family Law Office serving the people of Santa Cruz County. As an attorney I believe each case is as unique as the relationship and family involved. I limit my practice to family law and I strive to understand your circumstances and develop an approach suited for your case.
Copyright Law Offices of Keith M. Dysart
More information about Law Offices of Keith M. Dysart
View all articles published by Law Offices of Keith M. Dysart
Disclaimer: While every effort has been made to ensure the accuracy of this publication, it is not intended to provide legal advice as individual situations will differ and should be discussed with an expert and/or lawyer. For specific technical or legal advice on the information provided and related topics, please contact the author.
