How to Make Monetary Gifts

Monetary gifts are the best way to lessen the tax burden on your estate. Give gifts up to $10,000 per year without penalty. It is better to see gifts of your assets change the lives of beneficiaries before incapacity or death occurs. Giving gifts prior to incapacity will also help in planning for long-term health care.

Instructions

Difficulty: Moderate

Things You’ll Need:

• Attorney
• Financial advisor

1. Consult a financial advisor to determine how much disbursement of assets your estate can handle. Do not want diminish your style of living.
2. Assess your daily living needs. Do not deplete your income to avoid taxation of your assets.
3. Listen to the advice of your attorney when it comes to gift giving. Your estate may not be able to handle the number and size of the gifts you want to distribute.
4. Select which of your assets you want to give as gifts before your incapacity or death.
5. Determine which of your beneficiaries you want to receive gifts of your assets.
6. Transfer other assets into a trust or a corporation to help relieve the tax burden.
7. Set an annual monetary amount of gifts to distribute to beneficiaries. If you become incapacitated, your estate will continue to protect itself from taxation.

Tips & Warnings

• It is important to know who will pay taxes on the monetary gift—you or the beneficiary.
• Do not give away assets without consulting a lawyer and financial advisor.