In later years if you feel you are comfortably situated you might take a look at gifting either as a way of moving assets out of your estate or to pass some of your wealth on to your children before you die. Charitable gifting during lifetime can also be a satisfying way to benefit organizations and causes you support. If structured correctly it has tax benefits and also allows you to see your gift in action. There are questions you should consider when gifting either to individuals or to organizations. Here are some of them.
Regarding individuals, if you give cash, there are no capital gains consequences. If you give highly appreciated assets, the recipients, if they are not charities, are generally better off inheriting rather than being gifted to during your lifetime. Inherited assets receive a “step up” in basis at death avoiding capital gains taxes that would be payable if property, such as real estate or stock that has increased in value is gifted during life.
For Pennsylvania inheritance taxes, a gift only takes the property out of your estate if you live for another year.
There is no one size fits all when it comes to giving. Get professional help if you need it.
Esquire, Colliton Law Associates, P.C. Janet Colliton has practiced law for over 38 years, 37 of them in Chester County, Pennsylvania, a suburb of Philadelphia. Her practice, Colliton Law Associates, PC, is limited to elder law, Medicaid, including advice, applications and appeals, and other benefits planning including Veterans benefits, life care and special needs planning, guardianships, retirement, and estate planning and administration.