Maryland Estate Planning Lawyer: Best Ways to Give Money Tax Free

Making gifts during your lifetime can be an excellent way to distribute part of your estate now while reducing your tax liability.

Creating a Will and Trusts are essential aspects of estate planning however creating a plan isn’t just about distributing your assets after you die. With thoughtful planning and guidance you may make gifts during your lifetime and in so doing reduce your taxable estate thus benefiting your loved ones now and in the future.


Tax Free Gift Giving

1. You may give up to $14,000 a year (2013 amount) in cash or assets to as many people as you desire. Anytime you give more than $14,000 annually to any one person you must file a gift-tax return and the excess amount will be applied toward, and thus reduce, your unified lifetime gift and estate tax exclusion of $5.25 million (2013 exclusion).

2. You may pay an unlimited amount in educational or medical expenses for another person, so long as you give the money directly to the institution where the expense was incurred.

If a gift exceeds the exclusion, you will pay gift tax on the excess amount. The top tax rate on gifts and estates is 40%.


Charitable Giving

Charitable donations are another way to reduce your estate. Investing in charitable gift funds and community foundations allow those donations to stretch beyond your death.

You can also create various charitable trusts including a charitable lead trust, from which a charity receives the income and your heirs the principal; or a charitable remainder trust, in which your heirs get the income and the charity receives the principal.

For a free, confidential conversation to discuss these and other estate planning matters, or to create your own estate plan, contact Maryland estate planning attorney Stephen J. Reichert at 410-299-4959, sreichert@reichertlegal.com or by clicking here.

Day, evening and weekend appointments are available in office or at your residence. Mr. Reichert personally serves clients in Baltimore, Baltimore County, Anne Arundel County, Howard County, Carroll County, Harford County, Frederick County and Montgomery County.