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Gift Planning in Older Age

Gift Planning for Every Age

Gift planning – also called “planned giving” – is a great way for individuals to schedule future financial gifts for their loved ones, nonprofits, educational institutions and other organizations. While many give for emotional reasons, gift planning can also provide the giver with financial benefits such as reduced tax rates and a guaranteed source of income.

No matter where you are in your life or what your financial situation is, there is a gift planning strategy for you. The following slides will show you which gift planning options are most appropriate during each part of your life.

Mid-Life: 40s-50s

In your 40s and 50s you may have appreciated assets that have gained value over time, such as stocks, that you wish to utilize. You may also be planning more actively for retirement.

Fortunately, salaries are at their highest during this period of your life – around $50,000 on average.1 Take advantage of this extra income with these planned gifts:

  • Life Insurance – You can name an irrevocable primary beneficiary and grant them sole ownership of your policy so they receive the full amount after your death, or you can split the policy between multiple entities so each receives a percentage of the policy.

 

  • Gift of Appreciated Securities – Securities are investments like stocks, bonds and mutual funds that can increase in monetary value over time. If you gift appreciated securities, you do not owe capital gains tax and you can save money with income tax deductions.

Later Life: 60s-70s

At this phase, you may have retired or reduced the hours you work per week. You may benefit from a steady, guaranteed source of income, especially if you have medical and housing payments.

The following gift options ensure you receive a constant stream of income when you need it most:

  • Charitable Gift Annuities – Make an up-front gift with cash, securities or property in exchange for a fixed income and tax deductions. When you pass away, the principal goes to the entity designated to receive the gift.

 

  • Charitable Remainder Trusts – In a charitable remainder unitrust (CRT), the giver receives income depending on the fluctuating value of their trust and can add more money to the trust at any time. In a charitable remainder annuity trust (CRAT), the giver receives fixed income and cannot add more money. You get income tax deductions, and the entire value of the trust goes to your designated beneficiary once the trust expires.

Golden Years: 80s-90s

In their 80s and 90s, people are coping with long-term care and housing payments. They are making the final adjustments to their finances so their money and assets go to the proper entities.

  • Real Estate – If you are downsizing or have multiple properties, you can gift this property. This can be highly advantageous as you can get a full market value income tax deduction and bypass capital gains tax.

 

  • Charitable Lead Trust – If you haven’t already, start a charitable lead trust. The money in the trust goes to charities until your estate taxes are reduced. Once the trust expires, the rest goes to your beneficiaries.

 

  • Re-Evaluating Previous Gifts – You want to make sure that all established gifts have up-to-date beneficiaries and ensure all legal documents are consistent with your wishes.

Get Help with Estate Planning from The Law Offices of David L. Carrier, P.C.

As you can see, there are numerous gift planning options for those who wish to put their money to good use both during and after their life. However, the tax benefits and results of each plan can be confusing without proper legal guidance.

Fortunately, the estate planning lawyers at The Law Offices of David L. Carrier, P.C. can help you determine which gift plan is best for your unique situation. We have faithfully served more than 10,000 Michigan families over the past 35 years – a huge testament to our success.

To get started, call us at 616-361-8400 today for more information.