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Heritage Tree LogoWhat Are the Benefits of Gifting Assets During Estate Planning?

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One estate planning strategy that is commonly used is gifting assets via charitable trusts. In this way, you may be able to transfer additional assets to your beneficiaries without incurring any tax implications. Follow along to find out more benefits of gifting assets during estate planning and how one of the proficient Butler County trust attorneys at Heritage Elder Law & Estate Planning, LLC can help you in executing this.

What are the different types of charitable trusts?

The two main types of charitable trusts in the state of Pennsylvania are charitable leads trusts and charitable remainder trusts. For one, a charitable leads trust is one in which part of your assets will be allocated to the charities of your choosing over a certain period. And after this certain period has passed, your remaining assets will be allocated to your designated beneficiaries either tax-free or with significant tax savings.

On the other hand, a charitable remainder trust is one in which a part of your income is distributed back to you or your designated beneficiaries. And after you have passed on, your remaining assets will be distributed to the charities of your choosing.

What are the different benefits of gifting assets in an estate plan?

As insinuated above, distributing annual gifts in your estate plan will allow you to transfer additional assets to your designated beneficiaries without making them deal with any tax implications. And as far as taxes go, gifting can also allow you to reduce the value of your estate for tax purposes.

Notably, the IRS will allow you to gift up to $17,000 per year to anyone without the need to file a gift tax return and without using any lifetime exemption. For married couples, this gift must be at least $34,000 per year. But a gift tax return may be required if gift splitting is involved.

Aside from tax purposes, additional benefits of gifting assets in an estate plan are as follows:

  • Gifting can allow you to have greater control over how your assets are distributed and to whom.
  • Gifting can allow you to spread out the transfer of your assets over time.
  • Gifting can allow you to transfer your assets quickly and cost-effectively.
  • Gifting can allow you to give money to your loved one while you are still alive.
  • Gifting can allow you to give to charities of your choosing that are otherwise ineligible for certain tax exemptions.
  • Gifting can allow you to plan for the future needs of your beneficiaries without having to liquidate your assets.

For more information on how to gift assets in your estate plan, reach out to one of the talented Butler County estate planning attorneys today. We look forward to collaborating with you.

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