How to Use Year-End Gifting to Reduce Your Taxable Estate Before 2026 Ends
If you are lucky enough to have a large estate and money you don't expect to need, here's how you can start reducing your taxable estate early.
Overview
Most people's estates will not face estate taxes. That said, some people are wealthy enough that their estates will exceed the $15 million basic exclusion amount. If that is likely to be an issue for your estate, you have options before you die. The easiest one is to simply give money away, and you won't owe taxes on those gifts if you follow the rules. Here's what you need to know.
While gift tax rules apply regardless of the size of your estate, once you have a better handle on what your heirs may have to deal with, you can start to consider gifting. When a person passes away, the value of all their assets is tallied. If the total exceeds a certain threshold, the excess is taxed. That threshold is, as noted, $15 million per person. So a married couple would, technically, have a $30 million threshold. But that $30 million figure is a bit more complicated than it looks.
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Originally published at www.fool.com.