Gifting strategies

Consider these strategies to distribute your wealth

A group of people of all ages, watching and playing chess.You have a variety of gifting strategies and wealth transfer tools that can help you distribute your assets to your family and other beneficiaries. These techniques may help you meet your estate planning goals, such as avoiding probate and reducing estate taxes.
 
Gifting to individuals
In its simplest form, gifting represents an opportunity to transfer assets to children or other beneficiaries during your lifetime and reduce your estate. Sophisticated gifting techniques can also help you:

  • Provide income for yourself or your heirs
  • Leverage your annual exclusion gifts
  • Pay for a child’s education

Annual gifting
You may gift up to a certain dollar amount per person per tax year. This amount is called the annual exclusion. Any gift over that amount requires you to file a gift tax return.
 

A older woman building a snowman outdoors with her granddaughter.

 
Medical and education expenses
If you pay someone’s medical or education expenses directly to the provider, the gift is not included in your annual exclusion amount.
 
Gifting to 529 college savings plans
If you’re helping your child or grandchild save for college using a 529 college savings plan, you can gift up to the annual exclusion per year tax free or you can make up to five years’ worth of annual exclusion gifts in one year to benefit any one person.
 
Before investing, you should consider whether your or your beneficiary’s home state offers any state tax or other benefits that are only available for investments in that state’s 529 college savings plan.
 
Please consider the investment objectives, risks, charges and expenses carefully before investing in a 529 savings plan. The official statement, which contains this and other information, can be obtained by calling your financial advisor. Read it carefully before you invest.
 
Click the Next button to learn about using trusts to transfer wealth.