Lifetime gifts are the most common way to reduce the eventual estate tax and are often used as part of broader charitable and family wealth-transfer strategies. Gifts may be of cash, securities, real estate, art… pretty much any asset. We are tempted by hearsay to think the limit is $19,000 per giver per recipient, but there is much more freedom than that.

In Washington State, there is no limit on lifetime gifts, and lifetime gifts aren’t considered in the eventual State estate tax. For Federal purposes, lifetime gifts are factored into the estate tax calculation. There is a $19,000/person annual exclusion limit; however, that simply means that if you exceed that amount within a calendar year, you must file a gift tax return showing that you’ve used a portion of your roughly $15 million Federal estate tax exemption. This isn’t an issue for anyone with an estate well below that level (twice that level for couples with properly structured Wills or Living Trust).

Coordinating gift strategies with properly drafted estate documents helps ensure assets are transferred efficiently and in accordance with your long-term goals.