is talking about the importance of making big gifts in 2012, but the critical
question for many, is how much can you realistically afford to gift without
jeopardizing your own financial security?
How much can you afford to gift
now, with a possible resurgence of the gift tax lurking next year? As you may
know, current law allows you gift the fairly huge sum of $5 million (more than
$10 million for a married couple) without triggering a gift tax. That law is
expiring at year’s end, and it’s anyone’s guess what happens next. It certainly
is possible that next year’s tax climate will be much less generous.
So, from a tax planning
standpoint, there may never be a better time for you to make a large gift. But,
you know that life is about more than tax planning. The real question you need
to answer, if you are inclined to make substantial gifts, is whether – and how
much – you can afford to give. Wealth
Strategies Journal recently published an article, “How Much Can You Gift,” to help you
through the decision process.
Some things to consider:
- Your personal goals, especially for retirement.
Will they still be adequate after your generous gift?
- Your age and health. Do you have many more
income-producing years ahead, or is it possible you may need more money to
provide for yourself and your spouse, especially if there are health issues to
Remember, you should not gift
away – in any form – assets that are essential for your own financial needs.
You can gift away assets to your children (or trusts for them) that you will
never need. And, there are estate planning tools that can help you make gifts
that you may need, with “just in case” access if you do.
Reference: Wealth Strategies
Journal (November 8, 2012) “How Much Can You Gift”