Speak with an Attorney about Your Gifting Plan
You might have heard that you can give some of your money to your heirs before you pass away without any tax consequences. While this is sometimes the case, if you do not speak to an estate planning attorney before you give your money away, you might be making a big mistake. A well-intentioned, but improperly given, gift can cause more problems and greater financial burdens than anyone wants deal with.
The IRS' gift tax exclusion of $13,000 seems like a simple rule. However, there is no such thing as a simple tax rule or law. For example, the rule only applies to how much you can give away during the course of one tax year without paying a gift tax. There is also a lifetime gift tax exemption. If you go over it during your life, you cannot take advantage of the yearly exclusion. Additionally, the amount that you do give away during your life that is under the lifetime exemption amount gets subtracted from the estate tax exemption for your estate.
The gift tax law sounds complicated because it is. If you are planning on making gifting a part of your estate plan, you should seek out an experienced attorney to make sure that you gift properly. Gifting can be a part of your estate plan, but it needs to be done right.
ABOUT THE AUTHOR: Michael Davidov
Experienced estate planning attorneys Forest Hills NY of Davidov Law Group offers estate planning and business planning resources to residents of Forest Hills NY.
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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.