A lot is said about the intricacies of estate planning, however in the end it is a relatively easy matter.

The point is to direct possessions that when came from you into the possession of your beneficiaries as rapidly and just as possible. When this is done after you pass away the last will or some type of trust is typically utilized to achieve this, but the truth is you can select to transfer assets to others while you are still alive. This could be done through making gifts. Obviously we’re all familiar with the instant feeling of fulfillment that a person experiences through the happiness of giving. This in itself makes gift giving something that you may want to think about. Besides the complete satisfaction and pleasure there are useful advantages to this course of action as well.
For something, there is a $5 million estate tax exemption. Under current law the exclusion is combined with the gift tax exemption. So if the general value of your estate is more than $5 million you would do well to minimize its value to get estate tax efficiency. Due to the fact that these two levies are unified, if you were to use some part of this $5 million to offer tax-free gifts while you are still alive that amount would be deducted from your readily available estate tax exclusion.

In addition to the exemption, each taxpayer might provide up to $13,000 per year to an unrestricted number of gift recipients, without the gift tax without impacting their lifetime merged gift/estate tax exemption. This is something that can be used to great advantage if you make annual gifts to a variety of different individuals over a sustained duration of time.
Lifetime gifting can also be helpful to those who are trying to find methods to “invest down” their assets in an effort to get approved for Medicaid to pay for long-term care. There is, nevertheless, the five year “recall” duration to take into consideration. Making significant presents within five years of obtaining Medicaid to spend for long-lasting care can result in a penalty, normally an extension of time before you may qualify for Medicaid advantages.

So you must thoroughly plan ahead to make the most of this chance. And there are different ways to gift possessions, some more beneficial than others. The very best way to do so is with the assistance of an estate planning attorney who has a wealth of experience assisting clients prepare to resolve long-term care expenses.