If you have a taxable estate or would simply like to see your loved ones
benefit from your generosity during your lifetime, you may want to consider
“giving” while you are living. A recent
article in Forbes titled “Best Ways To Give Your Heirs Money While
You're Alive,” explored this subject.
There are tax limitations that come into play when you are making gifts. In order to avoid triggering any transfer
taxes, you’ll want be aware of the limits and “safe harbors.” For example, you can gift up to $14,000 worth
of assets per recipient ($28,000 for a married couple) without even having to
report the gifts to the IRS. In
addition, there are many ways to “leverage” your exemptions to give away more
value than you might imagine.
Remember that this is a complicated area where you may want guidance from
your trusted advisors. There are several
layers of State and Federal estate, gift, and generation-skipping transfer
taxes to take into account. And although
gifts themselves are generally not income taxable, they may give rise to income
or capital gains tax consequences. Giving
while you are living can provide a wonderful benefit for both the givers and
the receivers if you have a proper plan in place.