If you are like many Americans, you like to give gifts just as much as you enjyo receiving them. Luckily, if you're serious about estate planning there's a handy approach called gifting that can possibly save your family, friends and heirs a lot of money on estate taxes in the future.
Gifting is exactly what it sounds like: a gift. It's a gift that can be given to a spouse, a family member or a friend. It is a tactic that has been used often by people to minimize the value of their estate and can be done in numerous ways.
Each person in the U.S. can give assets or property of up to $12,000 a year. That amount applies to each individual they gift to. This gift can be given to basically anyone without paying any gift taxes, as long as the amount gifted stays below the limit. You can give gifts, tax-free, to as many people as you wish. You can also gift an unlimited amount of property to charity and your spouse.
By law, you can gift a spouse unlimited amounts of property each year without paying any taxes. This is not always suggested however, since it just shifts the bigger estate burden onto your spouse. One helpful idea is to team up with your spouse and gift to specific people, such as children and grandchildren. When you and a spouse get together and gift, which the IRS has named "gift splitting," you can give up to $24,000 to each individual without paying any gift tax. This allows you to quickly minimize your estate by a significant amount.
Gifting is also an excellent way to give assets to your family that will wind up increasing in value. That way, you not only reduce the amount that may be taxed in your estate, but you reduce the amount that your asset would've grown to by the time you passed away.
While estate planning is often put off because of the uncomfortable topic of death, it may be one of the most important financial planning tools available. It might also be one of the most crucial ways to save your family from heartache. In the end, gifting allows you to take advantage of tax savings and choose the way you want to be remembered, which is truly a gift that will keep on giving.
Gifting is exactly what it sounds like: a gift. It's a gift that can be given to a spouse, a family member or a friend. It is a tactic that has been used often by people to minimize the value of their estate and can be done in numerous ways.
Each person in the U.S. can give assets or property of up to $12,000 a year. That amount applies to each individual they gift to. This gift can be given to basically anyone without paying any gift taxes, as long as the amount gifted stays below the limit. You can give gifts, tax-free, to as many people as you wish. You can also gift an unlimited amount of property to charity and your spouse.
By law, you can gift a spouse unlimited amounts of property each year without paying any taxes. This is not always suggested however, since it just shifts the bigger estate burden onto your spouse. One helpful idea is to team up with your spouse and gift to specific people, such as children and grandchildren. When you and a spouse get together and gift, which the IRS has named "gift splitting," you can give up to $24,000 to each individual without paying any gift tax. This allows you to quickly minimize your estate by a significant amount.
Gifting is also an excellent way to give assets to your family that will wind up increasing in value. That way, you not only reduce the amount that may be taxed in your estate, but you reduce the amount that your asset would've grown to by the time you passed away.
While estate planning is often put off because of the uncomfortable topic of death, it may be one of the most important financial planning tools available. It might also be one of the most crucial ways to save your family from heartache. In the end, gifting allows you to take advantage of tax savings and choose the way you want to be remembered, which is truly a gift that will keep on giving.
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