How To Give Money Now: Advice From Pittsburgh Estate Planning Attorneys
Here at Temple & Frayer, we believe that complete estate planning is not just about predetermining the distribution of your assets after your death. It also means deciding what you want to give away in the here and now. With careful planning, you may be able to reduce the size of the estate you pay taxes on now while transferring assets 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 convey 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 personal income tax. There are two simple ways that you can give gifts without incurring additional taxes.
- You may give up to $14,000 in cash or assets every year to as many people as you like.
- You can pay medical bills and college tuition, tax-free, for the benefit of someone you choose by paying the respective institutions directly.
Keep in mind that you must file a gift tax return if you give more than $14,000 annually to someone. Any extra that you pay beyond that will be applied toward your unified lifetime gift and your estate tax exclusion of $5.25 million. If your gifts exceed that limit, you will be responsible for paying 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 may be complicated. So, if your estate is substantial and you anticipate that you may run into complications, you should contact our Pittsburgh estate planning lawyer first. You may also reduce the size of your estate through charitable donations. These donations can be directed to funds for charitable gifts 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 donate to that fund and increase your investment without paying additional taxes. When you decide to make a contribution, you can put your name on the contribution you make to a nonprofit that you select on your own. A community foundation is 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 principal. Whatever your situation or financial goals may be, our legal team at Temple & Frayer 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
Discuss your goals and concerns about your estate and the future of your assets. We are here to help you accomplish your goals and to give you peace of mind about your estate.