The Power of Making Lifetime Gifts

November 7, 2017

A very effective strategy to employ in order to ensure that your estate will not be subject to estate tax is to make sufficient gifts during your lifetime so that at your death your estate is smaller than the then-current federal estate tax exemption amount.

Your lifetime gifts above the annual exclusion amount are, however, subject to a gift tax that is imposed at the same rate as the estate tax. This “unified” system is intended to eliminate any tax advantage to making gifts. But certain types of lifetime transfers are not subject to gift tax. While many wait until year-end to make such tax-free gifts, any time during the year is a good time to do so, and the sooner the better.

In separate articles, we discuss how to take advantage of the Annual Gift Exclusion; the Tuition Payment Exclusion; Section 529 Plans; the Medical Payments Exclusion; making Gifts in Trust; Charitable Gifts; and Making Gifts from your IRA.

If you would like to discuss making lifetime gifts, please contact us to set up a free consultation.