HOUSTON (PRWEB) May 22, 2023
“It’s a big deal to those who are planning for the future,” said Will Stafford, a Houston estate planning attorney with Stafford Law Firm. “People can get creative and give more to their loved ones without getting penalized by Uncle Sam in the long run.”
Last fall, the IRS announced several new inflation adjustments that U.S. taxpayers will be able to take advantage of for the tax year 2023. Included among these changes was an increase to the standard deduction, a higher Unified Estate and Gift Tax Exemption (or lifetime exemption), and—most notably—an increase to the annual exclusion for gifts.
For the 2023 tax year, the IRS Gift Tax Exemption will be $17,000 per recipient—an increase from $16,000 in 2022. These exempt gifts do not impact your lifetime estate and gift tax exemption, which will also increase from $12.06 million to $12.92 million in 2023.
Providing Support to Adult Children
For many Americans, helping their adult children get ahead in life is a joy and a pleasure. Whether that means helping with a down payment on their first home, purchasing a new vehicle, or giving a cash wedding present, people looking to shower their loved ones with gifts will see that they can give more without tax implications.
“Some people give money to their kids generously without even thinking about the tax implications, and they’re rewarded with a big headache come tax season,” Stafford explained. “You want to be able to strategically and wisely give what you want to give to your children.”
A higher gift tax exclusion in 2023 means fewer taxes paid on the funds you use to support your loved ones.
Gift Tax Exclusion and Medicaid Planning
One substantial estate planning strategy involves preparing for end-of-life care. That’s why enlisting the help of a Medicaid planning attorney is a common practice for those in their retirement years.This strategy involves legally and ethically reducing your wealth to qualify for Medicaid’s long-term care coverage. One method involves gift-giving, but it must be done at least five years prior to needing Medicaid coverage due to the look-back period involved.
For this reason, it’s crucial to have a gifting plan in place well in advance, Stafford noted.
“Since a long-term stay in a nursing home can easily diminish your wealth over just a few years. You’ll need to qualify for the necessary coverage and care while preserving your wealth for future generations,” he said.
Stafford Law Firm is located at 9601 Katy Freeway, Suite 470, Houston, Texas 77024.
About Stafford Law Firm
Will Stafford is a Houston area elder law and estate planning attorney supporting individuals in making the best choices for their estate and their loved ones' futures. Consultations are free, and legal advice for estate planning is given with complete transparency.
With extensive experience in elder law, Medicaid planning, asset protection, and other practice areas related to estate planning in Houston, Stafford Law Firm serves as a vital resource for retired individuals.
Book an initial consultation with an experienced Texas estate planning attorney. You can also, visit Stafford Law Firm at 9601 Katy Freeway, Suite 470, Houston, Texas 77024.