If You Have a Large Estate, Consider Gifting
Gifting is a valuable part of most estate plans, but when financial advisors think of gifting they usually just think in terms of the annual exclusion gift that can be made each year. The annual exclusion gift increased in 2023 to $17,000 per person, so for a couple, $34,000 can be given to a single individual. A client can make annual exclusion gifts to any number of individuals during a calendar year, and the recipient of the gift does not need to be related.
So, if a client wants to make a $17,000 gift to a child and another $17,000 gift to a good friend, both will qualify as annual exclusion gifts. The annual exclusion gift is a simple transaction where a gift tax return does not need to be filed – which may account for its popularity. As indicated by the chart at right, over a period of time a single small annual exclusion gift can remove a considerable amount from an individual’s estate.
