What is a gifting program and how does it work?

A gifting program is an estate planning tool used to minimize taxes due by transferring valuable assets to individuals. Gifting is the legal act of transferring ownership of a property or asset from one party to another without exchanging anything of value in return. In Kansas, gifting is governed by state laws and must meet certain criteria to be valid. The first step of the gifting program process is to determine how much you can give without incurring any gift tax liability. Each year, you can give a certain amount in monetary gifts, such as cash or checks, to an unlimited number of people without incurring any gift taxes. In addition, you can give up to $15,000 per individual gift recipient (known as the annual exclusion) without incurring any gift taxes. Once you know how much you can give, you must decide who to give it to and what type of asset to transfer. You will then need to properly document the transfer and present it to the recipient, usually in the form of a gift letter. You must also file a gift tax return to report the transfer and to inform the Internal Revenue Service (IRS). By giving away assets during your lifetime, you not only reduce your estate’s value but also reduce the taxes owed upon your death. This makes a gifting program a valuable estate planning tool. However, you should make sure to consult with a qualified attorney or financial advisor so you understand all the laws and regulations pertaining to gifting in Kansas.

Related FAQs

How should I select executors for my estate?
What is a disclaimer and how does it work?
What is a trust protector and what does it do?
Should I consider creating a trust for my pet?
Is estate planning expensive?
What is a Living Will and how does it work?
What is a beneficiary designation and how does it work?
What is the difference between a living trust and a living will?
What legal documents will I need to establish my estate plan?
What happens to my estate if I die intestate?

What is a gifting program and how does it work?

Related FAQs

Related Blog Posts