At Michael F. Kanzer & Associates , PC, we believe estate planning isn’t just about preparing for the end—it’s also about making meaningful decisions in the present. One of the most thoughtful and strategic ways to care for your family now is through pre-death gifting. Whether it’s helping a child buy their first home, supporting a grandchild’s education, or simply easing the financial load for loved ones, gifting during your lifetime allows you to make a real difference today. Even better, it can offer significant tax advantages and reduce the complexity of your estate later. The key is knowing how to do it properly—so your generosity benefits others without creating unintended consequences for yourself or your family.
Why Consider Gifting During Your Lifetime?
There are several reasons to consider giving assets to your loved ones before passing. Beyond financial strategy, it’s an emotional and relational decision that often brings just as much joy to the giver as to the recipient.
1. See the Impact of Your Support
One of the most rewarding aspects of lifetime gifting is the chance to witness the benefits in real time. Whether it’s a business startup, a college graduation, or a more comfortable lifestyle, you get to enjoy the results of your generosity alongside the people you care about.
2. Reduce Your Taxable Estate
Every dollar you give away (within legal limits) lowers the total value of your estate, which can translate into tax savings down the road. With proper planning, you can pass more to your loved ones and less to the IRS.
3. Simplify the Probate Process
Assets gifted during your lifetime bypass the probate system, which means your family may have fewer legal hurdles and a faster path to financial stability after your passing.
4. Potential Asset Protection
When done thoughtfully, lifetime gifting can sometimes help protect assets from future creditors or long-term care costs. However, this must be carefully managed to avoid Medicaid penalties or other unintended issues.
How to Give Assets Early—and Wisely
Pre-death gifting isn’t just a matter of generosity—it’s a strategic part of estate planning. Here are a few of the most effective and legally sound ways to give:
Annual Exclusion Gifts
You can give up to $18,000 per person (or $36,000 per couple) each year without triggering federal gift taxes. This is a simple way to transfer wealth while avoiding complicated filings.
529 College Savings Plan Contributions
Want to support a child or grandchild’s education? Contributions to a 529 plan grow tax-free, and you can “superfund” up to five years’ worth of gifts at once—up to $90,000 per beneficiary.
Gifting Appreciated Assets
Instead of selling assets and paying capital gains taxes, consider gifting them. Your loved ones inherit your cost basis, but it can still be a powerful way to transfer value while minimizing tax exposure.
Forgivable Loans
In some cases, you can structure a loan to a loved one that’s later forgiven—effectively making it a gift, but with more flexibility and documentation.
Irrevocable Trusts
For those with larger estates or more complex needs, gifting through a trust allows you to maintain some control over how the assets are used while removing them from your estate.
Key Things to Keep in Mind
Even well-intentioned gifts can have consequences if not planned properly. Here are a few things we always help clients consider:
- Gift Tax Rules: While most people won’t exceed the lifetime exemption (currently $13.61 million), larger gifts should still be reported to the IRS.
- Medicaid Planning: Gifting can affect your eligibility for Medicaid if long-term care is in your future. Timing is everything.
- Family Dynamics: Transparency and fairness are essential. Unplanned or uneven gifting can lead to hurt feelings or future disputes.
Give with Intention and a Plan
At Michael F. Kanzer & Associates , PC, we’ve seen how pre-death gifting can create lasting impact, strengthen family bonds, and simplify estate matters down the road. But we’ve also seen how poor planning can lead to unnecessary taxes, missed opportunities, or unintended legal issues. That’s why we’re here. So, contact us today to help you give the right way, with purpose and protection.