I have more than 40 years of experience safeguarding the futures of Oklahomans and
their families. I’ll ensure
your rights are protected.


    Estate & Probate » Blog » Four Issues to Consider About Lifetime Gifts

    Four Issues to Consider About Lifetime Gifts

    Most of us are familiar with the quote that it is better to give than it is to receive. No place does this quote hold more true than the field of estate planning. By making gifting part of your estate plan, you can realize some substantial tax-savings advantages as well as other benefits. If you are debating making lifetime gifting part of your estate plan, this article reviews some important issues that you should consider.

    Current Lifetime Gift Exemption Amounts

    A person in 2021 can transfer $11.7 million during his or her lifetime without being subject to any estate or gift taxes. If the assets that you are passing on are greater than this amount, a 40% tax will be placed on the amount that surpasses this threshold.

    If your estate is subject to federal estate taxes, gifting assets while you are still alive is one of the best ways to reduce the taxes that are ultimately placed on your estate.

    Gifting Can Avoid Substantial Future Taxes

    By gifting assets from your estate today, you can sometimes avoid future appreciation and subsequently substantial future taxes in your estate. The taxes today that you might face today could be substantially less than what they would be if an asset’s values increase substantially. Also, if you wait to pass an asset to a beneficiary until your death, the asset would likely receive a step-up in value to a new basis. Consequently, a beneficiary would likely realize a smaller gain by receiving an asset at the time of your death instead of receiving a gift while the asset-holder is still alive.

    Lifetime Gifts Lower Estate Taxes

    If your estate is valuable enough to be subject to estate taxes, periodic lifetime gifts can substantially reduce your estate tax bill. The annual gift tax exclusion allows a person to give away up to $14,000 per recipient without facing taxes. Additionally, direct payments for tuition or medical expenses incurred by a loved one are excluded. Not only can paying for these costs greatly help a loved one, but you can also reduce your taxable estate substantially by making the most of lifetime gifts.

    Making Lifetime Gifts is Not Always the Best Idea

    While some definite advantages can be realized by making lifetime gifting part of your estate plan, this strategy is not the right approach for everyone. Some of the reasons why you might want to think twice about utilizing lifetime gifting include:

    • Certain gifts might be subject to substantial gift taxes
    • The person debating making the gift might have an uncertain economic future
    • Some beneficiaries cannot be fully trusted to utilize assets in a financially wise manner
    • You lose control over assets that you transfer

    Contact an Experienced Estate Planning Attorney

    Lifetime gifts are just one of many estate planning strategies that can prove helpful in achieving your goals. If you need the assistance of an estate planning attorney, do not hesitate to contact attorney Jim A Lyon today for assistance.

    Ethan Moran
    Ethan Moran
    09:36 28 Dec 22
    To my wife and I, our probate case was complicated. Not to Jim! He made it look so easy, and his attention to detail is incredible. Highly recommend to anyone seeking an estate planning lawyer.
    Philippe Joshua
    Philippe Joshua
    17:56 30 Nov 22
    Jim's firm was referred to me by a friend who knew I was looking for an estate planning lawyer. I can't say enough good stuff about him. He's genuine, thorough and highly skilled. Strongly recommend.
    See All Reviews
    Estate & Probate » Blog » Four Issues to Consider About Lifetime Gifts