Image may be NSFW.
Clik here to view.
Another common estate planning myth is one that emanates from the gift tax system. In 2010, the rule with respect to gift tax is that you may give up to $13,000 to as many people as you want without having to file a gift tax return.
Note that the amount that can be gifted is stated incorrectly in the myth, as most people remain unaware of the ongoing increases to the allowable gift amount.
Also under the current rules, even if a gift tax return must be filed because more than $13,000 is given to one person, the giver of the gift will not pay any gift tax until they have gifted more than $1 million during their lifetime. Thus, if a person has $100,000 and gives all of it away in one year to one person, they will need to file a gift tax return, but they will not owe any gift tax because the gift does not exceed the lifetime threshold.
Gina M. Barry, Esq.
