#RichLifeLawyer Show 50: Estate Planning Year End Gifts to Avoid Estate Tax
I was at an event thrown by some financial planners the other day and the topic presented was gifting.
The talk itself centered on the importance of gifting and giving to charity and the joy it can bring the person doing the giving, with just a little bit of talk about tax savings strategies, and more specifically how to avoid estate tax while giving.
I wanted to expound on that just a little bit today, as the end of 2016 draws closer and closer.
$14,000 As Many Times As You Want
The most important of the yearly giving rules to remember is that you (and your spouse) can give away $14,000 to as many different people as you’d like and avoid estate tax completely.
For example, you can give away $14,000 to all of your kids and your grandkids (and anyone else you want) and your wife can do the same, and you will still keep intact your entire $2 million dollar estate tax exemption to be used when you pass away.
You might consider doing this to see how the people you give the money to use it or to simply see them enjoy it while you are still around.
School And Medical With No Limits
You can also reduce and thus avoid estate tax by paying for the school or medical expenses of a person directly.
What does this mean?
To qualify all you have to do is write a check directly to the institution providing the service.
Again, this is a great way to reduce your estate while helping the people you love while you are in a place that you can see their appreciation.
You can also simply give directly charity.
And there’s a little bonus with this one. It can reduce your estate AND it can give you income tax break for the year.
The rules on charitable giving are a little specific depending on your specific financial and family situation, so I’m not going to give you any blanket rules here except consult with your estate planning attorney and/or accountant before making a sizable charitable gift to make sure you are taking advantage of the tax laws.
No you have no excuse not to get out there and give this year!
P.S. Don’t forget to check out my free ebook: “7 Estate Planning Mistakes Every Family Needs to Avoid.” It’s packed full of helpful information to help you get everything you want out of life (and after life).
Christopher Small is a Seattle estate planning lawyer who helps people get rich and live forever. He is also the owner of CMS Law Firm LLC.