Lifetime Gifting Strategies in Tampa Explained
Many people in Tampa want to share their wealth with loved ones before they pass away. One potential benefit is experiencing your loved ones enjoying these gifts during your lifetime, but there are many other advantages to consider. Why should you consider lifetime gifting strategies in Tampa? How do these strategies work? Can an estate planning attorney help you implement these strategies?
Taking Advantage of the Lifetime Gift and Estate Tax Exemption
Perhaps the most obvious strategy involves taking advantage of the lifetime gift and estate tax exemption. Although first enacted in 2017, this exemption seems destined to continue well beyond 2025. The exemption was set to sunset in 2025, but the Big, Beautiful Bill has eliminated this deadline. This ensures a lifetime gift exemption of $15 million per person, which could rise even higher to keep pace with inflation.
But what exactly is the gift and estate tax exemption? Essentially, you can give away $14 million of your wealth during your lifetime without incurring any federal gift taxes. Most people will fall below this threshold, which means they will not have to pay any federal gift taxes. Since Florida also lacks gift or estate taxes, this represents the total elimination of gift taxes for most families in Tampa. Only those with net worths above $14 million will need to worry about the federal gift tax.
Note that you can combine the gift tax exemption with the estate tax exemption. For example, you might choose to give away a portion of your wealth during your lifetime while keeping the remainder set aside for beneficiaries after you pass away. As long as the total value of both gifts and inheritance remains under the estate and gift tax exemption, you can minimize tax burdens for your family.
There Are Limits to How Much You Can Give Away Per Year
That being said, you can only give away a certain portion of your wealth each year while staying below the annual gift exemption. According to the Internal Revenue Service (IRS), this annual exemption was $19,000 in 2025. Although this might seem like a relatively low amount, it is set to increase with each passing year. For example, the annual exemption in 2022 was $16,000, and it has risen by $1,000 each year since then.
Note that this exemption applies to each “donee” or recipient. In other words, you can give this sum of money to each beneficiary each year without incurring gift taxes. Many choose to combine annual gifts with lifetime gifts, thereby distributing their wealth in a gradual manner while still holding back a significant amount for inheritance after their passing. If you give away more than the annual gifting exemption each year, the IRS subtracts the excess amount from your lifetime exemption.
Can a Seminole Estate Planning Lawyer Help With Gifting Strategies?
If you’d like to explore lifetime gifting strategies in more detail, consider speaking with an experienced estate planning lawyer in New Port Richey. While gifting is a perfectly legitimate estate planning option, you may want to consider your full range of options before you decide how to proceed. Continue this conversation by contacting Knudsen Law today.
Source:
irs.gov/businesses/small-businesses-self-employed/frequently-asked-questions-on-gift-taxes
