New Yorkers who are seeking to shield their assets as efficiently as possible yet still want to be generous with their loved ones should think beyond the simplest aspects of drafting estate planning documents. Understanding the available loopholes to perform certain acts of giving are wise strategies to avoid tax implications while providing loved ones with items the person wants them to have. For example, the beginning of the year is generally viewed as the optimal time to give estate planning gifts. To understand the law fully and be protected, it is always wise to have legal assistance.
Under the law as it stands, less than 1 percent of estates will face taxes, so the majority does not need to be concerned about gifting to keep estate and gift taxes under control. However, there are other reasons why giving gifts to loved ones on an annual basis is a wise step and is a sound strategy when crafting an estate plan. Giving a lifetime gift will help loved ones immediately and they will not need to wait until an undetermined time. The person giving the gift will know how the recipient is using the gift and provide a guideline for the future.
A lifetime gift lets loved one prepare to manage the wealth they will eventually inherit. This is a sound strategy to get them ready for what they will face rather than it all hitting them in one big lump sum. If the person giving the gift is well-prepared, it can lower the income taxes and help in increasing the family’s wealth post-taxes. In general, people will give their gifts near year’s end. This is unwise as there are multiple benefits to doing so early in the new year.
With the gift tax exclusion, it is possible to give $15,000 per person without tax implications. This can be given to as many people as the giver wants. When giving property, it is important to remember that it might appreciate and the value at the time of the gift will be key to being protected from taxes. Gifts for education and medical care are tax free in some cases.
To effectively pass wealth on to loved ones, there are many tactics that can be beneficial to the person who is providing the gift and the recipient of the gift. Having an estate plan for after the person has died is a smart decision, but it is also useful to understand ways to try and pass items on without waiting. Having legal help from a law firm that specializes in estate planning can provide guidance and advice in these and any other matter related to the future and being protected.