What is a gifting program and how does it work?

A gifting program is an estate planning tool used to reduce estate taxes and transfer assets from one generation to the next. It is commonly used in Massachusetts to pass on assets to younger generations while avoiding the hefty estate taxes that would otherwise apply. The gifting program works by allowing the transfer of assets during an individual’s lifetime by “gifting” them to family members or other entities. Generally, any size of gift can be given, as long as it does not exceed the IRS gift tax exclusion amount, which is currently $15,000 per person per year. This means that any one person can gift each other $15,000 worth of assets in a given year without any gift taxes being due. Because of the IRS gift tax exclusion, the gifting program allows individuals to give assets to other family members without having to pay a large amount in estate taxes. Gifting property to future generations is also beneficial for tax purposes, as it can avoid the need to pay an estate tax in the future. As a result, gifting programs can be a great way to save on estate taxes while providing a financial legacy for future generations.

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What is a gifting program and how does it work?

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