• Skip to primary navigation
  • Skip to main content

The Hayes Law Firm

Estate and Elder Law Information Center

  • (626) 403-2292
  • Attend a Free Webinar
  • Home
  • Our Firm
    • About Our Firm
    • Virtual Estate Planning
    • About The American Academy
    • Advantages of Working With Our Firm
    • Attorney and Staff Profiles
    • Speaker Connection
    • Multi-Media
    • Reviews
    • College Internship Program (Marketing)
  • Estate Planning
    • Asset Protection & Business Planning
    • Estate and Gift Taxes: Figures
    • Family-Owned Businesses
    • Financial Planning Assistance
    • Incapacity Planning
    • IRA & Retirement Planning
    • Legacy Planning
    • LGBTQ+ Estate Planning
    • Pet Planning
    • SECURE Act
    • Special Needs Planning
  • Probate Process
    • CA Probate & Estate Planning Savings Calculator
    • California Probate Process
    • Common Probate Questions
    • Probate Resources
      • Bereavement Resources
      • How to Know if You Need Extra Help With Your Grieving
      • The Mourner’s Bill of Rights
      • Trust Administration & Probate Definitions
      • When a Loved One Passes Away With a Trust
      • When a Loved One Passes Away With a Will
    • Why Hire a Probate Attorney?
  • Trust Administration
    • Trust Administration Resources
    • Trust Administration Assistance
  • Resources
    • Feature Articles by The Hayes Law Firm
    • DocuBank
    • COVID-19 Estate Planning Resources
    • Educational Heroes
    • Elder Law Reports
    • Estate Planning Resources
      • Estate Planning Checkup
      • Estate Planning Definitions
      • Estate Planning Articles
      • Estate Planning Reports
      • Incapacity Planning Definitions
      • Is Your Estate Plan Outdated?
      • Top 10 Estate and Legacy Planning Techniques
    • Frequently Asked Questions
      • Estate Planning FAQ’s
      • FAQ’s for Families Without an Estate Plan
      • Legacy Wealth Planning FAQ’s
      • LGBTQ Estate Planning FAQ’s
      • Trust Administration & Probate FAQ’s
    • LGBTQ+ Resources
    • Newsletters
    • Special Needs Resources
  • Elder Law
    • Are You A Caregiver for a disabled loved one?
    • Coping With Alzheimer’s
    • Emergency Medi-Cal & Nursing Home Planning
    • Guardianship & Conservatorship
    • Hospice Care
    • Medi-Cal Planning
    • Veteran’s Benefits
  • Seminars and Webinars
  • Contact Us
    • Preparing for Your Initial Consultation
  • Blog

Take Advantage of Gifting to Reduce Your Estate

William Hayes · Oct 30, 2015 ·

 

Take Advantage of Gifting to Reduce Your Estate

 Compliments of The Hayes Law Firm,

Written By: The American Academy of Estate Planning Attorneys

For some of us, one reason we earn money is to provide the extras, the “non-necessities” to our loved ones. Few things are more exciting than seeing a child or grandchild unwrap an eagerly anticipated gift. The expressions on their faces, the delight in their voices: it’s priceless. But did you know that gift-giving also one of the time-tested strategies in estate planning? “Gifting” is a great way to reduce the overall size of your estate in order to avoid a potential future estate tax problem. The key is to properly plan for it.

Each year, anyone can gift up to $14,000 to as many people as they want. No particular reason or purpose is needed. It’s part of the “annual exclusion.” There are a few important tips to keep in mind. First, your efforts won’t serve the purpose of reducing your estate (and tax bill) until it’s actually out of your possession. If you write a check and it’s not cashed for months, it’s still yours until it’s endorsed and cashed. You can eliminate this concern with either a wire transfer or a cashier’s check since the funds are moved immediately in the process.

You also have the option of giving an unlimited amount of money for certain expenses. These funds are treated in the same way: they reduce your tax burden while benefiting the recipient. Those expenses include tuition for school (including college) and medical expenses. The key is to ensure the check is written to the hospital, physician or school in order to be able to take advantage of the tax benefits. By writing a check to a grandchild or his parents, it’s considered a gift and the $14,000 benefit maximum applies. You must ensure the payment is made directly to the provider. Medical expenses and tuition are two expensive bills for most families and gifting is an ideal way to meet their needs without worrying about gift or estate taxes.

Many clients are unaware they can also gift a percentage of certain property at a discount. This means you can give even more than the $14,000 annual amount.

Keep in mind, there are some restrictions that often come into play. By consulting with a qualified estate planning attorney, you can really make the most of those assets by gifting them to your loved ones through the proper financial vehicle. But, the best part? You get to witness the excitement and happiness your gift brings. Be sure the legalities are covered so it doesn’t come back to bite you during tax season.

The excitement of gifting brings great pleasure, but don’t underestimate the tax and legal considerations. Your estate planning attorney can work with you to design a strong gifting strategy to meet your estate planning and financial goals.

Sign up for our newsletter and get our news straight to your inbox!

Stay Informed

Where we are

The Hayes Law Firm
729 Mission St. #300
South Pasadena, CA 91030
Phone: (626) 403-2292
Fax: (626) 403-2299
Proud Memberaaepa

Office hours

Monday9:00 AM - 5:00 PM
Tuesday9:00 AM - 5:00 PM
Wednesday9:00 AM - 5:00 PM
Thursday9:00 AM - 5:00 PM
Friday9:00 AM - 5:00 PM

Map

map
  • Facebook
  • Instagram
  • LinkedIn
  • Pinterest
  • Twitter
  • YouTube

The information on this website is for general information purposes only. Nothing on this or associated pages, documents, comments, answers, emails, or other communications should be taken as legal advice for any individual case or situation. The information on this website is not intended to create, and receipt or viewing of this information does not constitute, an attorney-client relationship.

© 2022 · American Academy of Estate Planning Attorneys, Inc. | Disclaimer | Privacy Policy | Sitemap | Contact Us