When planning your estate, you may assume that as long as you have a will established, you can stop thinking about what will happen in the future. While a will is a beneficial tool, there are a number of important considerations you’ll need to make during this process to help ensure your assets and beneficiaries are protected after your passing. As such, one thing you may not have considered is the benefits of gifting assets before your passing. If you’re unsure why you should consider this option or what you must know, you’ll want to keep reading. The following blog explores the importance of speaking with Tampa estate planning lawyers to discuss if this is right for you.
Why Should I Consider Gifting Assets in Flordia?
Though giving away assets before your passing may seem counterintuitive to estate planning, it’s important to understand the benefits of this process. One of the primary reasons people decide to make transfers before their passing is to help reduce the overall value of their estate so they can avoid estate taxes. Though the state of Florida does not impose any estate taxes, the federal government does. As of 2025, estates valued at over $13.99 million will be taxed upon the passing of the estate owner. As such, if your estate is over this value, you can gift assets to beneficiaries to reduce the overall value of the estate and avoid taxes.
Another reason you may wish to gift assets as part of your estate is to help you plan for Medicaid. Unfortunately, there is an incorrect assumption that Medicaid and Medicare are the same thing, which is far from the truth. Medicaid is a form of insurance that helps cover the cost of those in long-term care facilities. However, this is a need-based program, so only those with less than $2,000 of assets will qualify. If you are interested in Medicaid planning, it’s important to understand that you must do this early, as there is a five-year look-back period. This means any transfers made out of your estate within this timeframe can be counted against you.
Is There Anything I Should Know Before Making Transfers?
Before you start writing checks for your loved ones, it’s important to understand the rules that surround gifting assets. Generally, you are permitted to gift up to $19,000 per beneficiary annually without incurring taxes on any of the transfers. Married couples are allotted up to $38,000 per beneficiary per year.
You should also note that you are granted a lifetime gift exemption, which as of 20205, has increased to $13.99 million. This means you can gift up to this amount over the course of your life without incurring taxes on these transfers. You should also understand that if you exceed the annual gift tax, the amount by which you exceed the limit will be counted towards the lifetime gift exemption first. For example, if you gift a beneficiary $50,000 in one calendar year, the first $19,000 would be exempt, and the remaining #31,000 would not be taxed, instead being counted as part of the lifetime exemption.
