It can be a simple generous gesture to help your children and grandchildren through difficult times. But it can also be a valuable estate-planning tool in reducing estate taxes. By gifting assets to heirs while living, people can reduce their taxable estate, which will in turn, reduce estate taxes. It is important to be conscious of all of your present circumstances when considering a gifting program. Even individuals with a seemingly large estate should make sure that they leave sufficient assets to continue the lifestyle they enjoy.
Gifts can be in many different forms.
This article discusses general outright gifts, as well as gifts utilized for the specific purpose of purchasing a life insurance policy. Other forms of gifts will be discussed in future articles. The most common gifting program would be the use of the annual gift exclusion. These gifts may consist of cash, real estate, securities, and business ownership. There are a few conditions on the gifts.