With the estate tax exemption scheduled to expire at the end of this year, many people are facing a very difficult decision. They have to decide quickly whether to take advantage of the limited window to give money to their heirs now or to keep it for their own use. There are a couple of things that need to be considered when making the decision.
First, consider how much you will need to provide for your own support. This should be obvious, but with the short period to make the gifts, many people are not properly considering what they will need in the future. It is usually a good idea to not only keep enough funds for your own support, but to keep more than that because you do not know how long you will live.
The next thing you should consider are the effects on the people you give to. Can they handle the unexpected wealth? Are there different ways to give the gifts that might be easier to handle for them? Will there be any tax issues for them as a result of the gifts? These are all things that you should ask about and consider.
You do not have much time to take advantage of the exemption, but that does not mean you should rush into making an ill-advised gift. Talk to an estate planning attorney about whether gifting now is appropriate for you.