Orange County California

Trust Attorneys


People with estates worth more than $5.43 million in 2015 may want to consider updating their estate plan in order to reduce potential estate tax liability when they die. One strategy people use for this purpose is to make annual gifts as part of their estate plan. While doing so is not complicated on its own, there are many considerations that should be made before proceeding.

6 Steps for Adding a Gifting Strategy to Your Estate Plan

If you’re ready to add a gifting strategy to your estate plan, consider taking the following steps:

  1. Calculate the size of your estate and determine your potential estate tax liability.
  2. Determine what impact a gifting strategy might have on this potential estate tax.
  3. Discuss with your attorney the various types of gifts that can be made without incurring gift tax.
  4. Determine what types of gifts you would like to make and in what amounts. For example, you may wish to make gifts by paying tuition directly to a school, paying medical expenses, or making gifts to a charity. You may also give up to $14,000 annually to any number of different recipients without incurring tax. This amount applies to 2015 and is set to increase over time.
  5. Consider the benefits of various types of gifts and the nature of assets used to make these gifts. An attorney or tax advisor can help you develop the strategy that most benefits your situation.
  6. Determine if a federal gift tax return needs to be filed, even if no tax is due at that time.

With potential tax liability at stake, it’s important to seek guidance before entering into any type of gifting strategy. We are here to help. Check out our client testimonials page today to learn more about how we have helped previous clients.


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