What do you know about gifting money to avoid probate?

On Behalf of | Jan 3, 2022 | Firm News |

You worked hard to provide for your family, and you want to continue doing so after you die. Gifting money helps you sidestep probate, but how do you go about it the right way?

U.S. News & World Report breaks down how to gift money in a way that benefits your estate. Learn how to ensure your beneficiaries get everything you want them to have.

The IRS limit

The IRS lets taxpayers make gifts during the tax year to reduce their estate’s value. Gifting limits may change each year, so research Florida’s most-current limit before gifting your beneficiaries. For instance, in 2021, you may gift as much as $15,000 to your beneficiaries. Even better, your recipients need not worry about paying taxes on the financial gift.

The appreciation value

Think twice about gifting appreciating assets, such as real estate or stocks. When these assets become part of an estate, the state adjusts their taxable amount when the owner dies. It could make sense to wait to transfer appreciating assets until after your death.

The spouse lifetime access trust

If you want to gift a sizeable amount of money to your spouse, you may use an irrevocable spousal lifetime access trust. Use the financial tool to shift money out of your estate while still retaining access to the funds. It makes sense to discuss this option with a financial professional, as the money move could come with its share of risks.

The charitable donation

You may like the idea of establishing a donor-advised fund instead of making a one-time charitable donation. With the donor-advised fund, you enjoy an instant tax deduction for funds funneled into the fund. Over time, you make charitable grants whenever you wish.

With the right knowledge, you better understand how to stay in full control of your estate. Gifting your money right now could help you and your beneficiaries more than waiting.