Indianapolis Estate Planning Attorneys: Benefits of lifetime gifting
Gifting assets is one of the most important aspects in estate planning. You must not only decide how to pass assets on, but also when to gift assets. To help you decide when to make estate gifts, the Indianapolis attorneys at 
Frank & Kraft explain the advantages of lifetime gifting. To help you decide when to make estate gifts, the Indianapolis attorneys at Frank & Kraft
explain the advantages of lifetime gifting.
Control Over Gifts
One of the most significant advantages of gifting during your lifetime is that it allows you to maintain control over how your assets are distributed. You can choose who gets the gift and how much it will benefit them. It is different from a Last Will and Testament where assets can be passed through the court system, which may lead to legal challenges or complications. By gifting now, you can ensure that your assets go to the people or organizations that matter most to you.
Personal Satisfaction
Additionally, there is a deep sense of personal satisfaction that comes from seeing your loved ones benefit from your generosity. Gifting while you’re alive allows you to see the impact of your gift, whether it’s helping a child pay for college tuition, paying a downpayment on a house, or supporting a cause that is dear to you. This personal involvement in the distribution of your assets can be immensely rewarding and create stronger bonds with family members and loved ones.
Minimizing Estate and Gift Taxes
Gifting during your lifetime can also have notable tax advantages. Federal gift and estate taxes are applicable to all estates. However, there are exclusions and exemptions that can allow you to transfer assets at a lower tax rate or tax-free. The IRS currently allows individuals to give up to a certain amount to each person per year without triggering gift tax. The annual gift tax exemption is what it’s called. You can save on estate taxes by making annual gifts to beneficiaries. The exemption allows people to transfer substantial amounts of wealth during their lifetimes without having to pay gift or estate tax. For those with a large estate, gifting during your lifetime can be an effective way to reduce the value of your estate below the exemption threshold, which means your heirs may avoid paying estate taxes altogether.
Avoiding Probate Complications
Another benefit of lifetime gifting is that it allows you to avoid probate complications for certain assets. If you transfer assets through your Will, the probate process is required. This can be expensive, time-consuming and emotionally draining to your heirs. Gifting assets now means they are transferred directly to your beneficiaries without going through probate, giving them immediate access to the funds or property. Gifting assets now means they are transferred directly to your beneficiaries without going through probate, providing them with immediate access to the funds or property.
Long-Term Care Planning
Furthermore, gifting while you are alive can help you plan for potential long-term care needs or other unexpected financial situations. Transferring assets to your loved ones now may allow you to qualify for Medicaid or other government benefits in the future by reducing the value of your estate, although this must be done carefully to comply with the look-back period rules that govern Medicaid eligibility.
Teaching Financial Responsibility
Gifting assets during your lifetime can also provide an opportunity to teach your beneficiaries financial responsibility. Giving a child or grandson a monetary present can teach them how to manage finances, invest and save for the long-term. You can help them develop good financial habits by giving them money while you’re still alive. This can be particularly beneficial for younger beneficiaries, or those who are not yet financially mature. For more information, join us at an upcoming FREE seminar. Contact the Indianapolis estate planning attorneys of
Frank & Kraft
for more information or to schedule an appointment. Read More!
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