When you have extra money, it can be gratifying to share your good fortune with family members and help support their dreams and goals. But gifting — whether you’re giving cash, stocks or other assets — has specific rules and regulations that can impact your financial situation. This overview shares important points you should know.
Gifting amounts and tax guidelines
The following are general guidelines regarding federal income tax rules applicable to gift taxes. However, we recommend that you seek advice from a qualified tax professional on the tax implications of gifting based on your personal circumstances.
The primary reason most people decide to gift money is simply to help a loved one. But you may enjoy additional advantages, too. The utilization of an individual’s annual exclusions can be an important part of an estate planning strategy to help reduce the value of your estate and your potential estate tax liability.
However, there are also many complexities and considerations that should be discussed with your tax professional prior to implementing a gifting strategy. For example, considerations may include items such as the basis of the assets being gifted, and whether the recipient would benefit from the gift today with carryover basis versus a step up in cost basis to heirs at the donor’s death.
It is important to remember that, with gifting, you will also reduce your current assets. So, you need to be confident that you won’t need that money for yourself before you give it to someone else. Ideally, you should consult with your financial planner to assess your current and expected future financial picture before making substantial gifts.
Gifting strategies
Straightforward cash gifts are the most common approach, but you can gift virtually any type of asset, including real estate. You might plan annual gifts to specific individuals or choose to support a specific goal or special occasion, such as a home down payment or a wedding. Other strategies include gifting contributions to a 529 plan, using trusts or leveraging family limited partnership interests.
To learn more about how we can help clients interested in gifting strategies, please talk with your Private Banker. Since gifting can be a complex topic that touches on many aspects beyond your financial plan, you should also consult with your tax, legal and estate professionals.
The information, views, opinions, and positions expressed by the author(s), presenter(s) and/or presented in the article are those of the author or individual who made the statement and do not necessarily reflect the policies, views, opinions, and positions of Hancock Whitney Bank. Hancock Whitney makes no representations as to the accuracy, completeness, timeliness, suitability, or validity of any information presented.
This information is general in nature and is provided for educational purposes only. Information provided and statements made should not be relied on or interpreted as accounting, financial planning, investment, legal, or tax advice. Hancock Whitney Bank encourages you to consult a professional for advice applicable to your specific situation.
Investment products and services, such as brokerage, advisory accounts, annuities, and insurance are offered through Hancock Whitney Investment Services, Inc., a registered broker/dealer, member FINRA/SIPC and an SEC-Registered Investment Advisor.
Hancock Whitney Bank offers other investment products, which may include asset management accounts as part of its Wealth Management Services. Hancock Whitney Bank and Hancock Whitney Investment Services Inc. are both wholly owned subsidiaries of Hancock Whitney Corporation.
NO BANK GUARANTEE | NOT A DEPOSIT | MAY LOSE VALUE | NOT FDIC INSURED |
NOT INSURED BY ANY FEDERAL GOVERNMENT AGENCY |