Gifting Through Your Estate Plan

Gifting through your estate plan is one way to share your resources with the people and organizations you care about.

What is Estate Planning and Gifting?

Gifting through your estate plan is one way to share your resources with the people and organizations you care about. It’s natural that you want to preserve your wealth for yourselves and ensure the security of your future. But it’s also an opportunity to make a lasting impact on loved ones or causes that matter most to you. The thought of planning out gifting while managing other aspects of retirement may seem overwhelming, but taking measured steps now will help secure healthy financial futures both for yourself and those who are important in your lives.

Benefits of Gifting Through Your Estate Plan

This act of generosity can provide multiple benefits not only for the recipients of the gifts but also for your own personal satisfaction.

Here are some of the key benefits of gifting through your estate plan:

1. Supporting the causes you care about: By including charitable giving in your estate plan, you have the opportunity to support the causes and organizations you’re passionate about. Whether it’s supporting education, the arts, healthcare, or any other area that you’d like to make a difference in, gifting through your estate plan can help ensure that your legacy continues to support these critical causes for years to come.

2. Tax benefits: Charitable giving can also provide significant tax benefits. Not only can you potentially reduce your estate tax liability, but you can also receive an income tax deduction for any charitable gifts made through your estate plan.

3. Providing for loved ones: Gifting through your estate plan can also help provide for loved ones who may need financial support after you’re gone. By setting up charitable trusts or foundations, you can ensure that your loved ones receive the support they need while also giving back to the community.

Related: What is a Special Needs Trust?

4. Leaving a meaningful legacy: Finally, gifting through your estate plan can help you leave a meaningful legacy. By making a tangible impact on the causes and organizations you care about, you can leave behind a lasting legacy that reflects your values and beliefs.

Related: How to Set Up A Charitable Giving Within a Living Trust

How to Make Annual Gifts

Making annual gifts is an essential aspect of any well-crafted estate plan. It is a powerful tool that can significantly reduce the tax burden on your estate and leave more for your loved ones. 

To make annual gifts, you must first be aware of the annual gift limit set by the IRS, which stands at $17,000 per person, per year. This amount is anticipated to increase to $18,000 per person, per year in 2024.

Understanding the Lifetime Gift Exemption and Filing a 709 Return

Understanding the Lifetime Gift Exemption and when to file a 709 Return is one of the important aspects of financial planning that individuals should pay attention to. Especially if you intend to gift a substantial amount of money or property to your loved ones. 

Simply put, the Lifetime Gift Exemption allows taxpayers to gift away a certain amount of assets without having to pay taxes. As of 2023, the lifetime gift exclusion, which is combined with the federal estate tax exemption, is $12.92 million for single people and $25.84 million for a married couple. 

Additionally, if you gift an amount that is above the annual limit, you may have to file a 709 return. This return allows the IRS to keep track of the amount of gifts that you have made and whether they are subject to any tax liability. Ultimately, understanding the Lifetime Gift Exemption and whether to file a 709 return is about protecting your assets and ensuring that your legacy is passed on without incurring unnecessary financial burdens and headaches for your loved ones.

When to Seek Professional Help with Estate Planning and Gifting

Estate planning and gifting can be an overwhelming and complex process, and it is normal to feel confused or unsure about where to begin. If you find yourself struggling to navigate the intricacies of estate planning and gifting, it may be time to seek out professional help. An estate planning attorney can provide valuable guidance and support as you make critical decisions about your assets and how they are distributed. 

If you are facing a particularly complicated estate planning situation, such as a large and diverse estate, business succession planning, or concerns about the future care of a loved one with special needs, seeking professional help may be even more important. Remember that estate planning is a critical component of your overall financial planning and can help ensure that you leave a lasting legacy for your loved ones. Don’t hesitate to reach out for help if you need it.

In summary, gifting through your estate plan provides a range of benefits, from tax savings to supporting the causes you care about. By making charitable giving a priority, you can ensure that your legacy reflects the compassion and generosity that you lived by.

Cornerstone Legal can help and I can come to you! I provide virtual or on-location visits throughout Michigan to make estate planning as easy as possible. 

Give me a call at (517) 708-2222 or email me at 

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