We want to give it all away, but should we? Estate planning attorneys hear this type of question all the time. The answer often times comes with qualifications. Gifts are created any time less than full market value is received for property. Internal Revenue Service regulations limit the size of gifts in most cases. No limits exist on the size of gifts to political organizations, or for medical or educational expenses, provided that money is paid directly to the medical provider or school.
The amount of lifetime gifts you have given will be added back to the value of your estate upon your death. The amount of your estate currently exempt from the 40% federal estate tax is $5,250,000.
In New York State there is a state level estate tax. This exemption is $1,000,000, and the rate is progressive with a top rate of 16%. Thankfully gifts made after January 1, 2000 are exempt from the New York state estate taxes.
Gifts made in 2013 are also federally exempted if the amount of the gift is less than $14000 from an individual, $28000 from a couple. Spouses can give gifts of any size to one another. If a gift is subject to federal gift tax, your records should include a relevant appraisal of the property, any documents involved in the transfer and any other paper work with regard to partially gifted assets or any other unusual items with regard to the transfer. In consultation with your estate planner, you can best determine how and when your assets will be transferred to those you hold most dear, in addition to mitigating any negative results in the future.
Latest posts by Saul Kobrick (see all)
- Hauppauge Elder Law Lawyers Warn about Financial Exploitation - May 22, 2018
- What Is Involved in Trust Administration? - May 15, 2018
- May is Older Americans Month — The Perfect Time to Review Your Estate Plan - May 4, 2018