What Are the Benefits of Gifting Assets Before Death?

You may assume the whole point of crafting your estate plan is to lay out instructions on which of your beneficiaries is to receive which of your assets when the day comes that you are no longer around to manage them yourself. However, our team often suggests that our client plan to give away some of these assets during their lifetime. We may happily and easily assist our clients in executing this task, as well. So, with that being said, please read on to discover the benefits of gifting your assets before your unfortunate death and how one of the seasoned Butler County estate planning & probate attorneys at Heritage Elder Law & Estate Planning, LLC can help you adopt this strategy effectively.

What are the benefits of gifting some of my assets before my death?

Especially if you are a high-net-worth individual, gifting some of your assets during your lifetime may work in your and your beneficiaries’ best interests. This is because you may face the federal gift and estate tax of up to 40 percent if your overall estate is valued at more than $13.99 million at the time of your death. And so, to make your estate worth less than $13.99 million, you should give away some of your assets earlier than you originally planned.

In addition, when gifting these assets to your desired beneficiaries, it is worth mentioning the annual gift tax limit. In the Commonwealth of Pennsylvania, this limit is $18,000 for unmarried individuals and $36,000 for married couples. Anything more than this may require you to report it on your federal tax return, thus creating tax implications. For this reason, it is best to get started on this gifting sooner rather than later so you give yourself enough time to reduce your overall estate value.

What are the non-financial reasons why I should gift assets before death?

Besides tax purposes, there are other non-monetary benefits for gifting your assets ahead of your unfortunate passing. For one, you may selfishly receive instant gratification from seeing your desired beneficiaries receive and use your assets for their benefit. For example, you may give your grandchild funds to pay for their tuition if they plan to attend a college or university in the coming year. Or, you may give your child your business assets, all while still being around to guide them on how to manage them properly and successfully.

In the end, you may not have much use for some of your assets anymore, so having them do nothing but have your estate’s value tip over the federal tax exemption is counterintuitive. For instance, you may have a piece of machinery or equipment you cannot operate anymore. Or, it may be depreciating and require maintenance and repairs, something your beneficiary may be more equipped to take on.

To conclude, one of the competent Butler County estate planning & probate attorneys from Heritage Elder Law & Estate Planning, LLC 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.