Gifting - Introduction

Lifetime gifting strategies serve an important role in estate planning, particularly when it comes to wealth transfer tax planning. Marital deduction planning and the creation of various types of trusts aren't the only methods of excluding assets from an estate for estate tax purposes; the more a person gives away during their lifetime, the smaller the gross estate will be at their death.

Individual gifts made during a person's lifetime will escape taxation as long as they are made in amounts below the annual exclusion amount ($14,000 in 2013). Some gifts, such as those made between U.S. citizen spouses, to a charity or paid directly towards tuition or medical expenses, are excluded from the federal gift tax altogether, regardless of their amount. Because making gifts throughout someone's lifetime will both help achieve wealth transfer goals and minimize the gross estate, it is important that the exposure to gift tax is recognized and planned for appropriately.



Gifting Strategies

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