Planned Gifting

The term “planned gifting” refers to a wide range of estate planning tools and techniques that an individual can use to transfer assets or property to beneficiaries with minimal or no tax consequences.

Examples of Property or Assets That Could Be Gifted
While an individual may make a significant income, this income might leave little assets after paying off the individual’s expenditures. Often, the best items to gift are items that do not produce a significant amount of income but are highly valuable for the purposes of estate taxes. Some examples of property that is gifted includes minority interest in a business, vacation homes, and valuable art collections.

There is a Wide Range of Planned Gifting Techniques
There is a variety of planned gifting methods, which differ based on a variety of facts including an individual’s age, the type of assets owned by the individual, the basis of the donor’s assets, how responsible the beneficiaries are, the individual’s citizenship, the amount of available tax exemptions, and the worth of the individual’s assets or property. Some ways that assets or property can be gifted are through direct gifts to a beneficiary or a charity of an individual’s choice. Another method is that individuals can use a trust to provide a gift. There are many types of trusts that are available to individuals who are interested in gifting assets or property to an individual. A third method of gifting property is that an individual can give away partial ownership of property. Yet another method of gifting is that individuals can make an “indirect” gift by providing assets or property to a company that the individual does not solely own.

Third Party Assets Protection Trusts
These specific types of trusts used for the benefit of others, including an individual’s heirs. Often helpful in obtaining a client’s trust plan, these types of trusts provide several tax advantages. In this type of trust, money is provided to a beneficiary at the discretion of a trustee.

Timing Can Be of the Essence
The time that a gift is made can prove essential. Individuals should be aware that the government allows individuals to gift a certain amount of money each year without gift tax consequences. Any gifting plans should attempt to make maximum use of this gift tax exemption. It is also worth noting that the government may not, in specific circumstances, consider it gifting if an individual makes payments for the benefit of another when these payments are directly provided to educational institutions or medical care givers.

Resources for Planned Gifting

What You Need to Know Before Donating Art

Massachusetts State Asset Protection Laws

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