When people in New Jersey hear the term “estate plan,” they usually think about a document that tells their beneficiaries who gets what after they have passed on. Although that is certainly the case in many situations, not everyone waits to distribute their estate. In fact, many will choose to practice gifting through their later years. Read on to learn about why this could be an approach you may want to take for your own estate.
Common barriers to gifting
Before you settle on gifting, it is important to understand some of the most common barriers that you may face. The first one is the act of starting the process. Because many choose to distribute assets at the end of their life, it can seem a little daunting to suddenly do the opposite. Many people also worry about how to gift their assets while maintaining their current lifestyle. However, if you are patient and smart about what you choose to gift, you could be able to gift assets without having to change your day-to-day life.
Knowing the law
An important thing to keep in mind is just how much you are legally allowed to give each year without paying a gift tax. According to U.S. law, you can give away $15,000 per year per person or $30,000 for married couples tax-free. Many will choose to go this route to ease the process of estate planning/probate. Probate is a common occurrence, but it can get out of hand if there are challenges to your assets. You may be able to avoid this by gifting your assets right now while you’re alive.
For many, giving to those who have less is an important part of their life goals. However, they may not feel confident in giving money to a large charity. In this instance, a person may be able to create their own private foundation, which they can then use to distribute their assets and funds.
Estate planning and gifting can involve various legal obstacles. That’s why it’s wise to have an attorney at your side to avoid making costly mistakes.