Gifting is an important part of estate planning for wealthy people. It provides a way to give money to family members before you pass away and lower the total value of an estate to minimize the impact of the estate tax. However, the amount you can gift without triggering gift taxes is not unlimited.
A single person can currently give $5.34 million total to other people tax-free. After that, any gifts are taxed.
Forbes, in a recent article titled "IRS Raises Limit on Tax-Free Lifetime Gifts for 2015," reports that this limit will increase to $5.43 million in 2015.
This will allow people who have already reached the exemption limit to give a little more, perhaps to a relative who was not yet born when the lifetime limit was previously reached.
The extra $90,000 could also be used to give to other relatives who might be in need. While it might not seem like very much, $90,000 could do a lot of good for one individual.
Because of this exemption increase, now would be a good time to revisit your gifting plan. Contact me by viewing my website and let's determine whether any other portion of your estate plan needs to be revised to account for other laws that might have changed.
Reference: Forbes (October 30, 2014) "IRS Raises Limit on Tax-Free Lifetime Gifts for 2015"