Benefits Of Gifting An Early Inheritance
As people start to accumulate wealth and assets, they often also begin to think about who they want to receive it after they pass away. While leaving a legacy for your family has many benefits, there are also many advantages to giving your loved ones their inheritance early through gifts. One of the biggest benefits of gifting an early inheritance is that you are able to see your loved ones enjoy the property during your lifetime. Below, our St. Petersburg estate planning lawyer outlines the legal benefits of gifting an early inheritance.
Avoiding Probate
After you pass away, your loved ones may have to go through the probate process. During probate, your assets are gathered and distributed to your beneficiaries in accordance with your will. Probate can take anywhere from a few months to over a year. If you gift your beneficiaries an early inheritance, though, they can receive it right away. Remember that you do not have to gift all of your property early. You can make lifetime gifts of your inheritance and place the remainder into a trust or pay on death account to avoid probate.
Paying for Education
Using the education tax exclusion, you can pay for your loved one’s tuition if they are attending an education facility that is eligible. These gifts are not taxable and so, there are no tax implications to paying for tuition. Paying the tuition costs for your loved one can help them avoid the heavy burden of student debt many students face upon graduation. There is also much relief in knowing that your loved one will have an easy start to their adult life.
Paying for Medical Expenses
Like the education tax exclusion, you can also use the medical tax exclusion if you want to gift an early inheritance. If your loved one has a medical condition they are receiving treatment for, or they have received treatment for, you can pay for their medical bills and use that as an early inheritance. Medical debt is one of the most common reasons for filing bankruptcy so by eliminating those bills for your beneficiary, they can focus on paying other expenses and save a significant amount of money.
No Gift Taxes
Florida has a very high tax-free limit on gifts, which means most people will not incur gift taxes when giving an early inheritance to their family. As of 2024, the tax-free limit is $18,000, up from $17,000 in 2023. This limit applies to every person you give a gift to, meaning you can gift several people in your family up to the limit without incurring taxes.
Our Estate Planning Lawyer in St. Petersburg Can Help with Early Gifts
Whether you want to gift outright or use legal tools such as trusts to leave your loved ones inheritances, our St. Petersburg estate planning lawyer can help. At Legacy Protection Lawyers, LLP, our experienced attorneys can help draft the documents you need, answer your questions, and ensure you and your heirs are prepared. Call us today at 727-471-5868 or contact us online to request a consultation and to get more information.
Source:
floridarevenue.com/taxes/taxesfees/Pages/estate_tax.aspx#:~:text=Florida Estate Tax,deduction for state estate taxes.
