What is a gifting program and how does it work?

A gifting program is a type of estate planning tool used to help reduce the amount of estate taxes owed by heirs. In the state of California, gifting programs allow individuals to give away a certain amount of money, property, or other assets (“gifts”) to family members, friends, or charity without having to pay taxes on the gifts. To take part in a gifting program, an individual must set up a trust or other legal entity. The gifting program is then structured with the giver (or “grantor”) transferring the gifts to the trust or other legal entity, which then distributes the gifts to the beneficiaries. Because gifting programs are designed to reduce or eliminate estate taxes, the amount of money, property, or other assets that an individual can give away is limited by the estate tax law in California. Generally, an individual can give up to $15,000 to each gift recipient each year without being subject to tax. In addition, individuals can initially gift up to $5,340,000 without incurring any estate taxes. Finally, it’s important to note that gifting programs are complex and require the expertise of an attorney. Therefore, if you’re considering taking part in a gifting program in California, it’s important to consult an experienced estate planning attorney to ensure the process is carried out properly.

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What is a gifting program and how does it work?

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