A major component of wealth management is making sure that your estate is set up so it passes as much as possible to your beneficiaries. In some cases, this can mean having to take steps to control the value of the estate because of estate taxes.
One option that you have for reducing the value of your estate is to give gifts to loved ones, favorite charities and anyone else you want. This is done while you’re still living, and it can be a valuable strategy for wealth management.
Federal gifting limits apply
There are limits to how much you can gift to each recipient each year. If you go over the established limit, the transaction must be reported to the Internal Revenue Service and taxes will apply.
In 2024, the annual gift limit is $18,000 per giver, per recipient. This means that a married couple could gift a total of $36,000 to a single person or entity without having to worry about a gift tax. This can be done annually, but checking the gifting limit for the year is critical because it changes.
Estate planning is critical
Creating a comprehensive estate plan that enables you to pass down as much of your wealth as possible to your loved ones is likely a priority for you. Taking the time to discuss the matter with someone familiar with estate planning is beneficial so you can learn your options and get everything set up to make things easier for your beneficiaries.