Passing on Assets to People with Special Needs
As the year comes to an end and the holidays approach, many people consider making gifts to their loved ones. Not only is passing assets on an excellent way to show your love and consideration for your family members, but it is also a great strategy to reduce the risk of taxes. This is because current federal tax law allows taxpayers to gift amounts of up to $15,000 each year to a recipient without this being counted against a person’s lifetime gift exemption of $11.4 million. There is also no better time than the present to make these distributions because the $11.4 million threshold will reduce to $5.49 million in 2026. This article reviews some special considerations that you should remember to follow, however, if you decide to transfer assets to a loved one with special needs. Anticipate the Risks If not properly navigated, passing on assets to loved ones with special needs can end up interfering with that person’s eligibility for government benefits. This is not the only risk involved with transferring assets, though. Even if a loved one does not receive Social Security Insurance or Medicaid, directly transferring assets might still not be a good idea if one [...]