Although many people have heard about gift tax, the complexity of the tax code means that people who could be benefiting from this concept are avoiding it altogether! Here are some tips for getting the most support for your special needs family member through gifting from a leading estate planning attorney in New Jersey.
Firstly, it is important to note that the current limit is set at a $14,000 annually and may change from year to year, so it’s important to stay up-to-date with the latest gifting legislation. At first, $14,000 doesn’t seem like it will go very far – however, the IRS states that:
- Paying for medical expenses does not count towards this total
- Paying educational or tuition expenses are excluded from this total
- Both of these expenses are also excluded from the lifetime taxable gift allowance
What if I Have a Special Needs Trust?
Special needs trusts are a popular option for families looking for a long-term solution to ensuring that their loved one has high quality care for their lifetime in the event that family caregivers pass away or can no longer make decisions for their loved one’s care.
In terms of gift giving, an irrevocable special needs trust requires certain language to be drafted into its documentation to ensure that these gifts qualify towards the annual exclusion amount. A revocable special needs trust where the same person is in the role of trustee and donor, however, the trust and the assets inside the trust cannot count as gifts.
Speak to estate planning attorneys in New Jersey today
Experienceestate planning attorneyFrank R. Campisano can assist you with navigating issues around gift giving as well as creating a special needs trust or drawing up other legal documents including Power of Attorney, medical directives and a Last Will and Testament. For more compassionate legal guidance, please contact us today or visit our website at https://www.scclegal.com/