It’s easy to get kind of jaded about the commercial nature of the end-of-year holidays, and the idea of looking at the calendar and recognizing that it is time to shop for gifts can sometimes seem like more of a chore and less of a joy. But when the day comes when you are actually giving the gifts to your loved ones, all of that resistance melts away and you feel something ineffable. If anything people often kind of wish that they had another gift to give once that last one last one has been opened.
When you are planning your estate, gift giving is encouraged under certain circumstances because of the tax advantages this practice provides. First of all, there is $1 million lifetime gift tax exclusion, so you can give a single gift of one million dollars, or a series of gifts that add up to a total of a million dollars, without having to pay the gift tax. In addition to this, there is a $13,000 per person annual exemption; you can give up to $13,000 each year to as many people as you want to tax free.
The other forms of tax-free gifts that can be given are medical and educational. You can give unlimited gifts to pay for the tuition or medical costs of us many recipients as you would like to free of the gift tax, but you do have to pay the educational institution or health care entity directly.
So the tax advantages of gift giving for estate planning purposes are clear. But there is another good reason to consider gift giving. Going back to the opening, it involves that feeling that you get when you see a loved one open a present around the holidays. Being able to see the excitement in the eyes of someone you love, and the genuine gratitude that follows it, is reciprocal gift in its own right.
Mr. Nirenstein is licensed to practice before the courts of the State of Connecticut and the United States District Court. He is a member of the Connecticut and Hartford County Bar Associations, and the Estate and Probate, Elder Law, Business Law and Real Estate Sections of the Connecticut Bar Association.
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