Now may be the best time to consider taking advantage of the lifetime gift tax exception recently passed in the tax reform law. The lifetime gift tax exemption was doubled. However, it is scheduled to revert to the previous level in a few years.
If you want to benefit from the increased limit, you need to act quickly. However, it is a good idea to consider that large amounts of cash that can potentially be wasted. There are many other options, according to News Max in "Gifting Wealth and the Estate Tax Law Under Trump."
The tips include:
- You can create an LLC that holds stock or other investments and gift your family members’ interests in the LLC. That allows you to control the investments, while still gifting to your family for their use later.
- If you own a company, you can create a trust and gift stock in the company to that trust for your family's benefit.
- It is a great time to fully fund any special needs trusts your relatives have.
- Now is a great time to create and fund trusts that your family can benefit from later. If you have enough money, you can even create a dynasty trust that will supplement your family for generations to come. An estate attorney can help you determine the best trust for your family.
- You can help younger family members purchase their first homes.
- Consider funding retirement options for younger family members, such as by purchasing annuities for them.