If you are like me, you get to the last few months of the year and think about how to give gifts to your children or others that you love.
Funny… the IRS even has something to say about that! For the IRS it’s all about assessing taxes and giving gifts is another one of those areas where we have to know the rules.
The current annual gift tax exemption is $15,000. This means that you — and your spouse if you are married — can each gift up to $15,000 in cash or other assets to any individual without gift tax liability; and without having to file a gift tax return (IRS Form 709). Any gift in excess of $15,000 requires the filing of a gift tax return but in most cases, will not require the actual payment of tax.
Making annual gifts is a wonderful estate planning tool because it transfers assets from one generation to another without tax liability. If you have a number of children or grandchildren, then you can give away significant amounts of your estate and avoid gift tax- and ultimately, estate tax liability.
If you would like to establish a gifting pattern or make regular annual gifts, you might want to consider establishing a trust for your loved ones, and then make gifts directly to the trust. That way you can control distributions to minor children or grandchildren. Making gifts to trusts is more complex but for some individuals it provides significant tax benefit and the ability to pass a legacy to future generations.
The gift tax rules change from time to time so if you are interested in passing assets to your children tax free during your lifetime, visit our website at https://www.dlgva.com/, or call us at 757-420-7722 to schedule a no charge consultation to learn more about the opportunities and benefits of lifetime giving and legacy planning.
DAVIS LAW GROUP, P.C.
P: 757.420.7722 / Doug@DLGVA.com
Wynngate Business Park – Greenbrier
516 Baylor Court
Chesapeake, Virginia 23320