Giving strategies are as varied as the family. And while lifetime giving has tax advantages, it is often about more than tax planning.
For many parents and grandparents, lifetime giving is an opportunity to help adult children with a down payment on a first home or to set up/contribute to a grandchild’s college savings fund. The lifetime giving threshold had been $14,000 per individual for several years. In 2018, it increased to $15,000 ($30,000 per couple).
Per person gifting
If you have several children or grandchildren, you can give each of them up to $15,000 ($30,000 per couple) without tax consequences each year. This could be a check or property such as a car or piece of heirloom jewelry valued up to the threshold. With gifts of property it is often wise to seek advice about whether a gift tax return is required.
These lifetime gifts can be given to loved ones to help them get a business off the ground or finish education with fewer student loans. You could pick up the costs of plane tickets or lodging for quality family vacations with lasting memories.
Tailored estate planning advice
Because each situation is unique there is no replacement for tailored estate planning legal advice. A sudden health crisis or accident could quickly change circumstances, so by taking advantage of lifetime giving options, you can often enjoy the reaction of loved ones.
The gifts you give during your lifetime are subtracted against your lifetime gift tax/estate tax exemption. But this amount is currently $11.18 million in 2018.
Consider ongoing gifting as a component or tool that you can use in coordination with an estate plan.