The recently passed tax reform law doubled the lifetime gift tax exemption from previous levels. However, the exemption is scheduled to revert to the previous level in a few years. That means if you want to take advantage of the increased limit, then you need to act quickly.
It is not always a good idea to gift large amounts of cash that can potentially be wasted and there are many other options. News Max listed some of them in "Gifting Wealth and the Estate Tax Law Under Trump," including:
- You can create an LLC that holds stock or other investments and gift your family members’ interests in the LLC. That allows you to control the investments, while still gifting to your family for their use later.
- If you own a company, you can create a trust and gift stock in the company to that trust for your family's benefit.
- It is a great time to fully fund any special needs trusts your relatives have.
- Now is a great time to create and fund trusts that your family can benefit from later. If you have enough money, you can even create a dynasty trust that will supplement your family for generations to come. A Cincinnati estate planning attorney can help you determine the best trust for your family.
- You can help younger family members purchase their first homes.
- Consider funding retirement options for younger family members, such as by purchasing annuities for them.
Remember: “An ounce of prevention is worth a pound of cure.” When making your estate plans or when probating an estate or administering a trust, do not go it alone. Be sure to engage a Cincinnati estate planning attorney.
For more information about estate planning, probate or trust administration in Cincinnati (and throughout the rest of Southwest Ohio) and to review free resources regarding estate planning, probate or trust administration, visit my website. If you have questions regarding this article or a particular legal matter, feel free to contact me at 513-399-PLAN (7526).
Reference: News Max (June 20, 2018) "Gifting Wealth and the Estate Tax Law Under Trump."