It is only natural, after a lifetime of hard work, to want to leave our wealth behind to those we love. Unfortunately, there are rules and regulations that do not always make doing so easy or straightforward. This article covers the essentials you need to know about gifting assets in Florida, including:
At the federal level, there are certain values of assets you can transfer without having to file a gift tax return. Above these amounts, taxes need to be filed on the gifts, which can make them more of a burden. Unfortunately, that number also changes every year. I believe that for this year, it is about $18,000.
Here in Florida, we do not have estate taxes, which simplifies things, but just because you can gift a certain amount of money in a certain year without triggering the need to file a gift tax return does not mean that that is necessarily a good idea. For example, if you are considering applying for Medicaid within the next five years, you need to remember that the rules for Medicaid asset transfers are very different from the IRS’s rules on making gifts of money. You could find yourself unable to qualify for Medicaid care, especially long term care if you gave away too much recently.
There are many advantages to using trusts to leave assets behind to those you love. Indeed, if someone is using a trust in an estate planning context, they can set up a living trust during their lifetime, which can make gifts after they pass away, with the added benefit that the trustee can manage those assets for the benefit of the beneficiary.
For example, if the beneficiary has special needs, is a minor, or is just awful with money, there can be certain safeguards that are built into the trust to make sure that the money helps the beneficiary instead of causing them harm.
In addition, there are other types of trusts, such as certain types of irrevocable trusts, into which you can make gifts throughout your lifetime. That way, the asset that is transferred to the trust does not count as part of your wealth or what you leave behind for purposes of estate taxes, which means they can reduce your taxable estate.
Attorney Myrna Serrano Setty is a dedicated estate planning lawyer currently working with families throughout Florida. For over two decades, she has helped countless individuals and couples strategically and generously pass on their wealth and assets without falling afoul of state or federal rules or taxes.
Hoping to gift assets to those you love? Worried about qualifying for Medicaid? Contact The Law Firm Of Myrna Myrna Serrano Setty, P.A today to schedule an initial consultation.
You would have to consult with a certified public accountant to determine the amount that you could gift and you would transfer those assets to the appropriate trust.
The fewer assets that have to go through probate after you pass, the easier and cheaper it will be to administrate your estate because there is less in it. Though it depends somewhat on the type of probate case and any particular dynamics, probate costs are usually higher if there are more assets that have to go through the process.
In addition, by engaging in a gifting strategy during your lifetime, your family members or beneficiaries could receive the benefit of that gift now, while you are still alive, without having to wait until you pass away to inherit.
If you gift out assets without updating your estate plan, you may cause some confusion after you pass away. This can, in extreme cases, lead to accusations of fraud or other conflict among your beneficiaries, which can severely impact the value of the estate.
Unfortunately, there are many mistakes you can make when gifting assets to family members. Many of these are caused by not communicating things correctly to the other family members who have certain expectations or assumptions about that item, which can cause some problems later on.
Another mistake occurs when individuals give away assets or wealth without realizing the impact it can have on programs like Medicaid. Unfortunately, in some circumstances, gifting away assets can actually make it more difficult for you to qualify for Medicaid in the future.
Perhaps the most common mistake is not properly documenting the transfer and not making it clear that, for example, the gift was voluntary and was not someone trying to take advantage of you.
In short, you really need to be careful with what, when, how and to whom they are gifting. So it is best to consult with both accountants and estate planning lawyers when thinking about specific gifts or a gifting strategy.
For more information on Gifting Assets, an initial consultation is your next best step. Get the information and legal answers you are seeking by calling (813) 686-7175 today.
Attorney Myrna Serrano Setty is a dedicated estate planning lawyer currently working with families throughout Florida. For over two decades, she has helped countless individuals and couples strategically and generously pass on their wealth and assets without falling afoul of state or federal rules or taxes.
Hoping to gift assets to those you love? Worried about qualifying for Medicaid? Contact The Law Firm Of Myrna Myrna Serrano Setty, P.A today to schedule an initial consultation.
You don’t have to handle probate and settlement on your own. Let The Law Firm of Myrna Serrano Setty, P.A. step in and take the burden of executorship off your shoulders. Call Us Now - (813) 686-7175
