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How to Give Money Now

Advice from a Pittsburgh Estate Planning Attorney

Here at Temple & Frayer Law, we believe that estate planning is not just about how you want your assets to be distributed after you die. It's also about deciding how much you want to give away in the here and now. With careful planning, you may be able to reduce your taxable estate right now and provide help to your beneficiaries while you are still living. With the help of a Pittsburgh estate planning lawyer at our firm, you can learn how to give gifts and money without incurring a gift tax.

Pennsylvania does not tax gifts that are made from detached or disinterested generosity. When transfers of cash or property are given in exchange for services, however, these will be Pennsylvania-taxable compensation and therefore will be subject to the personal income tax. There are two simple ways that you can give gifts without incurring additional taxes.

  1. You may give up to $14,000 in cash or assets every year to as many people as you like.
  2. You may pay an unlimited amount in medical or education expenses for another person if you give money directly to the institutions where the expenses were incurred.

Keep in mind that you must file a gift-tax return any time that you give more than $14,000 annually to any one person, and the excess amount will be applied toward your unified lifetime gift and your estate tax exclusion of $5.25 million. If your gifts exceed that exclusion at any time, you will have to pay anywhere up to the maximum gift tax of 40% on that excess amount.

Making Charitable Donations in Pittsburgh

In cases where you want to give away large gifts, the tax consequences can become complicated. So, if you have a large estate and anticipate that you may run into complications, you should contact our Pittsburgh estate planning lawyer first. Another way to reduce your estate is through charitable donations. These donations can be in the form of charitable gift funds or community foundations, and these donations can continue after your death.

For example, if you make a charitable gift fund through Fidelity, Vanguard, or another mutual fund company, you can make a tax-deductible donation and grow your investment tax-free. When you decide to make a contribution, you can make it in your name to a nonprofit of your choosing. A community foundation in another great way to reduce the value of your estate while you are still living. These foundations are regionally-based charities that take donations in cash, property, or stock ranging from as little $5,000 to as much as you want to give. These foundations will take your donation and invest in to bring about gains for local nonprofits.

Another option for making a charitable donation in Pennsylvania is by setting up a charitable lead trust. A charity will be able to receive income from this trust, and your heirs will receive the principle. Whatever your situation or financial goals may be, our legal team at Temple & Frayer Law will work closely with you to determine the best estate planning route for you to take. It is our goal to help you feel confident about the future of your estate, and we will provide you with the honest legal counsel and reliable answers you need throughout the entire process. Contact our firm today to discuss your goals and your concerns about your estate and the future of your assets! We are here to accomplish your goals and to give you peace of mind about your estate.

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The information on this website is for general information purposes only. Nothing on this site should be taken as legal advice for any individual case or situation. This information is not intended to create, and receipt or viewing does not constitute, an attorney-client relationship.