Once you give the gift, you can’t take it back. Before giving, you must determine if you can live comfortably without these assets.
Tailor the gift to the recipient. Cash gifts may be spent on something you deem frivolous. You may want to give something other than cash, such as forgiving debt or providing a down payment for a new home. You can also place the gift in a trust or custodial account rather than provide it outright; however, certain restrictions apply that require an attorney.
The gift itself may be tax-free but lead to other financial liabilities. For example, if you gift assets that have appreciated in value such as stocks or real estate, the recipient assumes your original cost basis and may pay capital gains tax when the stock or property is sold. The estate taxes saved by removing the value of the appreciated property from your estate should be weighed against the capital gains tax that will be paid by the recipient if the appreciated property is sold.
Gifting is an art form and requires careful planning. We can help you develop a gifting strategy to transfer wealth. For more information, pleasecontact us at 239-267-6655.