We understand how hard you must have worked to earn the assets you allocated throughout your adult life. While you may want to enjoy them and reap their benefits to their maximums, we encourage you to consider gifting them early to your intended beneficiaries. That said, please follow along to find out why you should gift some of your assets away before your death and how a proficient Broward County estate tax planning lawyer at The Probate Lawyers can help you understand the vision for this.
What should I know about the annual gift tax exemption?
Before you jump ahead to give away your assets, you must understand the annual gift tax exemption. Notably, the state of Florida does not have a gift tax. But you may still be subject to such at the federal level.
First of all, per the Internal Revenue Service (IRS), a gift is any transfer of money, assets, or property to someone else while not expecting to receive something of equal or greater value in return. The amount you are deemed to have gifted is based on the fair market value of the asset or property. That said, unmarried individuals and married couples may be allowed to gift up to $19,000 and $36,000 per year per individual, respectively, without having to report it in their federal tax return with the IRS.
Overall, not having to report these transfers may make you better off for the federal lifetime gift and estate tax exemptions, which will be explained further below.
Why should I gift some of my assets before my death?
To reemphasize, it may be in your best interest to gift the maximum amount allowed in a year to as many beneficiaries as you desire without having to report it. With this strategy, you may successfully reduce your estate’s overall value. This is good considering the federal estate tax, which may take away up to 40 percent of your taxable estate worth $13.99 million or more. In other words, you may give your beneficiaries the assets you always intended for them to inherit. Yet, you save them from serious tax implications that depreciate the overall amount they receive at the time of your unfortunate passing.
Similarly, there is the benefit of allowing your beneficiaries to avoid having to deal with the Florida probate court for asset distributions. This is because the probate process can be considerably costly for your beneficiaries, especially if your overall estate is rather large and complex. Again, this process may do nothing but diminish the net total your beneficiaries walk away with. This is not to mention that it adds further delay from gaining possession of these assets, which they may have needed or wanted quite some time ago at this point.
To conclude, a talented Broward County estate lawyer from The Probate Lawyers is willing to offer further clarification on this issue. So please do not hesitate to seek out our services. We look forward to helping you.
