Anonymous wrote:
Anonymous wrote:People make a big deal about not exceeding the $19,000 per person annual gift ceiling, but how onerous is it really to file a tax form for annual gifts above the $19,000 limit? As far as I understand it, you're not actually paying any tax itself until you exceed the lifetime maximum of almost $14M.
It depends on your level of gifting. If you’ve just written checks for the maximum yearly amount it’s not onerous at all. It can get difficult though.
My in-laws were retired 40 years ago so they have been helping relatives ever since. They paid for both of their mothers care as they got older. They gifted their children with the yearly exemption amounts and then added the in-laws when their children married. When grandchildren arrived they put money in an irrevocable trust every year to pay for schools, camps, trips, activities. They bought their children their first houses, grandchildren’s colleges, while still gifting the maximum yearly gift amounts.
They both died within one month of each other. They lived to be 85 years old and exceeded their lifetime maximum of $28 million (they each get an 14 million dollar exemption). Gifts given for all those years added up. They also owed estate taxes.
They created generation skipping trusts which was a smart move. Their children and grandchildren have money they can use based on the directions of the trusts, pretty boilerplate language. No one was handed millions outright but we all get six figure dollar amounts every year plus set amounts for major purchases. So now we don’t have to worry about our children or future grandchildren being homeless.
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