Smart Ways to Give While You Live

9:58 pm Estate Planning, Tax Planning

money gift 150x150 Smart Ways to Give While You LiveMany parents are justifiably concerned about what the last recession did to their children’s finances, and are looking for smart ways to help without hurting themselves or their children tax-wise.  An article at Forbes.com last week provides these tips:

Cash.  You can give anyone up to $14,000 per year in cash without incurring any gift taxes, so if you and your spouse decide to provide a cash gift to a child, you can give twice that amount — $28,000 – as a married couple.  If your child is married and has children, you can give to his or her spouse and each child as well.  Be sure to discuss this with your financial advisor before gifting cash.

Stock.  If you own stock that has appreciated significantly, you can give it to an adult child.  When they sell it, they will pay capital gains taxes but only on the amount you paid for it.  If you’re in a high tax bracket and have appreciated stock that also pays a good dividend, your children may be able to benefit from this income by keeping the stock.

Direct payments.  You can pay for tuition or medical expenses on behalf of a child if you pay the institutions directly, and the $14,000 limit does not apply.  To qualify for the tax exclusion, be sure you discuss this strategy with your estate planning attorney.

However you decide to help your children, be sure you plan first.  Contact our Newport Beach law firm for help.

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