Tips for Gifting Assets to Beneficiaries Before Your Passing
You can help your estate avoid the probate process by passing on some of your property to your children before you die. As a bonus, it can be satisfying to actually witness your loved ones and other beneficiaries enjoy the gifts you leave for them. However, there are some issues to consider with regard to gift giving and how it could affect your estate planning.
Giving gifts to loved ones
The easiest way to pass assets on to your beneficiaries is to transfer ownership of those assets. You could, for example, re-title your car in a child’s name or give sums of money to your kids each year. You should make sure you are leaving enough for yourself to get by, but there’s certainly something to be said for the satisfaction that comes with watching your children and other loved ones enjoy what you intend to leave to them.
Keep in mind that there are tax issues to navigate when you give large gifts. When you give assets to your children outright, the Internal Revenue Service will subject those gifts to the federal gift tax. You can give away $15,000 per person, per year, without incurring any gift taxes — anything above that, and you’re going to have that gift taxed.
For example, if you attempt to transfer the deed of your home to another person, it will significantly surpass that annual inclusion, although there is a lifetime exemption you can use.
You can avoid some tax responsibility by using revocable trusts. You would transfer property to the trust rather than directly to a beneficiary. Your children would be beneficiaries who inherit the property at the time of your death and the assets in the trust would avoid probate.
For more information on gift taxes and giving assets to your beneficiaries before your passing, contact a skilled Tampa estate planning lawyer with BaumannKangas Estate Law.