Michigan Gift Tax Planning Lawyers
Many individuals are interested in reducing their exposure to estate taxes by transferring cash and other assets to family members. By making yearly or one-time gifts, they seek to decrease their estate, and in so doing, reduce the amount of estate taxes that will be due upon death.
However, federal laws governing gift taxes are highly complex and continually evolving. To ensure you understand the current laws and any negative impacts your gifts could potentially have on your estate plan as a whole, speak with an experienced estate planning attorney at Schwartz Law Firm. From our office in Farmington Hills, we offer tailored legal advice designed to help each client reach his or her estate plan goals.
Annual Exclusion Gifting
The annual gift tax exclusion is the amount you may give to another person within a calendar year without gift tax consequences. For example, in 2010, the exclusion amount was set at $13,000 per person. That means you could give $13,000 to each of your children or $26,000 if married during that year without being subject to gift taxes. Each January, the annual exclusion amount is revised, so it is important that you have the most current information before gifting any assets.
Annual exclusion gifting is common when parents want to gift money, corporate interests, shares of stock and other assets to their children. It is also common when someone gets a terminal illness and wants to remove money from the estate so the medical bills or nursing home expenses do not devour what the person has built over a lifetime.
However, many people do not realize that once they gift an asset, they completely give up control over it. The receiver has full authority to make decisions regarding the gifted asset from that point on.
Million Dollar Lifetime Credit
If you gift more than the annual exclusion amount in a single year, a gift tax will apply to the excess amount and a gift tax return must be filed. However, the law allows you to make cumulative excess gifts of up to one million dollars over your lifetime before any gift tax is due. However, any excess gifts will reduce the amount that passes to your heirs free of federal estate tax upon your death.
Serving Oakland County and Beyond
While annual gifting can be an effective way to reduce your estate, it is not always the best move. For skilled guidance regarding the most beneficial way to help you reach your estate planning goals, meet with our attorneys. Contact us at our offices in Farmington Hills for a free initial consultation with an experienced Detroit estate tax attorney.