Estate Planning Lawyer in Grand Junction
For those who may have a taxable estate, making gifts to family members will reduce the size of the tax, as well as provide personal satisfaction to you and to the gift recipient. While gifts to individuals (as opposed to a charity) are not tax deductible, there is no gift tax unless the person making the gift has exceeded his lifetime gift exemption. Because gifting shifts the future income tax on the gifted property to the recipient, it is important to seek professional advice about income tax consequences. In many cases the shift in income tax responsibility is actually another benefit as your recipients may well be in a lower tax bracket.
Benefits of Gifting
Currently, each person can give $14,000 in cash or other assets to an unlimited number of people each year. Should you make gifts in excess of $14,000 a year to any one person, you will still avoid paying gift tax unless the overage causes you to exceed your lifetime $5,250,000 exemption. Once you have used your lifetime gift exclusion, you will be required to pay the 40% gift tax on any gift that exceeds the $14,000 per year exclusion.
The above information applies only to gifts to individuals. Donors can give any amount to qualified charities, pay no gift tax and receive a tax deduction equal to the value of the gift.
Various techniques are available to maximize the value of your gifting program. For example, using "gift splitting" you and your spouse can give $28,000 per individual instead of $14,000. Also, the value of a gift to a college student can be maximized by paying the amount of her gift directly to her school to be applied to tuition, thus avoiding a reduction in any student aid she may be receiving. You might also consider setting up a Charitable Remainder Trust.
Grand Junction Estate Planning Lawyer - Contact Us
The Law Offices of James A. Littlepage , a Grand Junction Estate Planning attorney, has been helping Western Slope families develop gifting plans since 1993. Mr. Littlepage has prepared over 2,000 estate plans and recently was recognized with a 2015 and 2016 Five Star Estate Planning Attorney℠ award. In 2014, 2013, 2012, 2011 and 2010 he received the Five Star Wealth Manager℠ award, as seen in 5280 and ColoradoBiz magazines. For assistance in developing a gifting program that is tailored to the needs of your family, please contact our Grand Junction office for a complimentary 30 minute consultation for estate planning and probate.
Contact an Estate Planning Lawyer in Grand Junction at the firm to discuss gifting.