Gifting Tips for Parents

Some parents may wish tohelp their children now, instead of leaving them money or assets in theirwill.  A good gifting plan means“everything from projecting your lifetime cash flow needs, to analyzing whatyou paid for the assets you might bestow or sell, to considering the mostappropriate tax moves.”

This year, each parent cangift up to $14,000 without worrying about a gift tax, or they can takeadvantage of the gift tax exemption for education and health-related expensesif the gift is given directly to the institution. 

Also, instead of cash, parents should considergiving their children stock.  If childrenare in a lower tax bracket and they decide to sell the stock, then they willpay less taxes than the parent.  Parents should watch out forthe kiddie tax, as any unearned income over $2,000 to children under 19 istaxed at the parent’s rate.

See Lynn Ballou, Best Ways to Give Your Heirs Money WhileYou’re Alive, Forbes, June 18, 2013.