Did you know that gifts can be taxed once they reach a certain value in a calendar year? That’s why gifting trusts exist. By sending gifts that exceed the exclusion amount to a gifting trust, you add to a beneficiary’s trust and don’t get hit with a huge tax penalty. Here are four types of gifting trusts that each have specific benefits.
- Gift Trust with Annual Exclusions – This is how you get around the gift exemption amount. You put anything that you gift above the exclusion amount into a trust for the individual. The money isn’t immediately available, but it also doesn’t get taxed into oblivion.
- Intentionally Defective Grantor Trust (IDGT) – This trust can be used to transfer a family business to another member of the family and offer protection from creditors for the beneficiary.
- Charitable Remainder Trust (CRT) – Are you looking to leave money to a charity rather than family? This is a form of gift trust that is specifically designed to gain tax benefits for the estate when you leave money to the charity of your choice.
- Qualified Personal Residence Trust (QPRT) – This is a way to transfer a home to your children at a value that is far lower than the current market value. It provides tax benefits as well as asset protection for the house.
More Generous Gifting Solutions in California
If you are making generous gifts to your beneficiaries or you want to plan for your future in other ways, the estate planning attorneys at Petrov Law Firm are happy to help. Contact us today at 619-344-0360 to get started on your estate plan.Read More