Gift Strategies
Lifetime transfers, or "gifts," are taxed to the donor to prevent avoidance of estate taxation at death. Such transfers are taxed at the time of gift and at the same tax rates applied to estates, according to the Federal Gift and Estate Tax Chart.The value of all gifts made during your lifetime is added back to your estate at death. The amount of any gift tax you paid becomes a credit against your resulting estate tax.
Federal gift tax law currently allows a donor to give up to $10,000 each year to an unlimited number of donees without incurring gift tax. This $10,000 annual exclusion provides an effective method of transferring property to heirs, while reducing future estate tax liability.
Another advantage of making lifetime gifts is that only the value of the gift at the time of gift is included in your estate. Any appreciation in value of the gifted property (from time of gift to time of death) is excluded from your estate.
Note: For other estate planning services (wills and trusts), contact an attorney or other certified professional who specializes in estate planning services.
