“We make a living by what we get. We make a life by what we give.” — Winston Churchill

Sharing with others is one of life’s greatest privileges. With the season of giving rapidly approaching, it’s a perfect time to consider planning to make gifts to the people you love.

For those looking to give to loved ones, annual exclusion gifts are my first recommendation. They allow you to transfer smaller amounts on an annual basis, rather than leaving large sums to beneficiaries after you’re gone. This approach lets you witness the impact of your hard work while you’re here.

The annual exclusion from the gift tax allows each individual to gift up to a specific amount of money per recipient each year without incurring a gift tax. Each January, the IRS calculates the amount for that calendar year. For 2024, the annual exclusion amount is $18,000. Furthermore, annual exclusion gifts do not count against the lifetime gift tax exemption and do not require the filing of a gift tax return.

Since each person has their own annual exclusion amount, a married couple can collectively gift $36,000 in 2024 to each donee. A married couple may choose to give to their adult child and the child’s spouse, for a total of $72,000. These tax-free gifts can significantly contribute to covering the child’s housing expenses for a year!

If someone chooses to gift to all of their children and grandchildren, a substantial amount of money can be transferred without tax implications each year, without any fancy strategies.

These gifts can be as simple as writing a check to the donee. A 529 plan is also a great option to help young ones save for college and prepare for their future. However, if you desire to make a gift to a minor, a disabled individual, or someone who is not so great at managing money, you need to set up an irrevocable trust. We can assist you with designing and implementing a special type of trust that would receive these annual exclusion gifts.

Additionally, direct gifts made to educational institutions or medical facilities do not count toward the $18,000 annual exclusion. It’s a great idea to help fund tuition at college, as well as private elementary or high school, or to assist someone who needs a medical procedure not covered by their insurance. Just be sure to pay the school or the medical provider directly!

If you’ve been wondering how to incorporate gift planning into your estate plan, let’s schedule a strategy session to discuss. Sometimes, the best option may involve further legal work, such as setting up trusts or structures, but other times, it just may be as simple as implementing a plan that we help you design! We are here to help!

Remember: It’s all about making a difference in the lives of others and experiencing the personal benefits of giving to those who matter most.