June 20, 2024

Is Moving Money to a Family Inheritance Trust Subject to Gift Tax?

The Estate Tax is tied to the Gift Tax. It’s Unified Credit. Understanding that the Estate Tax exemption is going away, the IRS has said that if we gift a portion now, and the Estate Tax exemption drops, this money that we’ve gifted will not factor into this lower Estate Tax. So we have this unique opportunity right now where the Tax Cuts and Jobs Act is still going on to make gifts to special types of Trust, where it will not play a role in the future with regards to your Estate Taxes.

Estate Attorney and Advisor Chris Berry of Castle Wealth Group answers questions on retirement and estate planning every Wednesday at 1pm. Register via this link or give our office a call at 844-885-4200.

Castle Wealth Group and Christopher Berry help families with estate planning, elder law, retirement planning, and tax planning from their offices in Brighton, Ann Arbor, Livonia, Bloomfield Hills, and Novi.

Castle Wealth Group helps families with their legal, financial, and tax planning for their retirement and legacy.

With the use of legal structures like revocable living trusts, Castle Trusts (asset protection trusts), Chris Berry and Castle Wealth Group can help your family plan, protect, and preserve what is important through their Retirement and Legacy Blueprint Process.

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Episode Transcript

Is moving money to a FIT subject to gift tax?

Welcome to Berry’s Bites. Please join our host, attorney and financial advisor, Chris Berry.

So getting back to this. The estate tax is tied to the gift tax. So it’s a unified credit. So if you were to gift $4 million to a FIT and you have $11 million estate tax exemption, well, that’s going to cut into your $11 million estate tax exemption because it’s a unified credit. And this is something we talked about before is with understanding that the estate tax exemption is going away, the IRS has said that if we gift a portion now, and then the estate tax exemption drops, this money that we’ve gifted will not factor into this lower estate tax. So we have this unique opportunity right now where the Tax Cuts and Jobs Act is still going on to make gifts to special types of trusts where it will not play a role in the future with regards to your estate taxes.