There’s Still Time to Use Your Annual Gift Tax Exclusion

gift tax

People processing the benefits of estate planning may assume that the simplest path is to hand over these assets when they pass away. However, depending on the value of your estate and where you live, it may be more beneficial to leverage annual gifts, either in addition to or instead of.

The IRS allows you to gift $17,000 per person as an individual and $34,000 as a couple each year. This is an extremely generous act that can help you decrease the value of your overall estate without incurring additional taxes. This is especially beneficial for wealthy older individuals who want to reduce the size of their taxable estate.

In the last quarter of the year, you still have the opportunity to make a meaningful holiday gift or to help readjust the overall value of your estate by considering making these gifts now. You may want to have additional conversations with your loved ones about how this may be supplemental to things they may receive when you pass away or may be considered as an advance on an inheritance.

Talk with an estate planning attorney in your area to determine whether or not this is the right fit for you and how to structure your gift planning. At our Pasadena estate planning law office, we can talk through through several strategies that help you understand each component of your overall plan. We work with individuals, families, and business owners to ensure that you have a comprehensive plan in place that aligns with your unique life.

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