Many retirees in Cape Coral may be surprised to hear that their estate planning options go farther than simply having a will. It can be very gratifying to see a loved one enjoy their inheritance, and one way to achieve this is through gifting.
The Internal Revenue Service defines a gift as something that one person transfers to another. It can be a physical asset, like a car, or it can be money. The caveat is that the person giving the gift does not expect to receive something of equal value in exchange. You can give some or all of a loved one’s inheritance as a gift during your lifetime. Gifts can be made outright, through a joint tenant deed or through a living trust.
Benefits of gifting
There are several benefits of gifting. First, gifts made while you are alive do not go through the probate process, which can be lengthy and expensive. If the gift is school tuition, it is possible that the gift will not be taxed, and there is the additional bonus that it can reduce your loved one’s need to take out student loans. Similarly, some people choose to pay off a loved one’s medical bills as a gift.
Limits in gifting
While there is a gift tax, it won’t affect most people. In 2020 you are permitted to gift up to $15,000 annually without the gift being taxed, and you can give up to $11.4 million over the course of your lifetime without being subject to the gift tax. Gifts made to a spouse are tax-free regardless of their value. So, while high-value assets may be subject to the gift tax, many gifts will not.
Learn more about gifting in Florida
Retirees may be interested in including gifting as a means of passing on their assets. However, it can still be helpful to discuss gifting with an attorney. Attorneys in Florida can help people make sound decisions regarding their estate, regardless of its size. Estate planning gives you the peace of mind of knowing your loved ones will be cared for and your estate will pass on according to your wishes.