A: Below are 3 different ideas to consider:
1: Gifting to Reduce Estate Value – In 2024, you can gift up to $18,000 per recipient annually without incurring gift taxes, or $36,000 as a married couple. These gifts lower your estate’s value without using your lifetime exemption. Gifts exceeding the annual limit count against your lifetime exemption and must be tracked. Exemptions apply to direct payments for tuition, medical care, or donations to qualified organizations.
2: Funding 529 or Custodial Accounts – Contributing to 529 plans for children or grandchildren removes funds from your taxable estate. You can gift $18,000 annually per beneficiary or accelerate five years’ worth for up to $90,000 in 2024. Under SECURE 2.0, up to $35,000 in 529 funds can be converted to a Roth IRA under specific conditions. Custodial accounts (UGMA/UTMA) are another option, though assets remain part of your estate until the beneficiary reaches adulthood.
3: Charitable Giving – Donations to qualified charities reduce both income taxes and your estate’s value. Bequests at death are deducted from your taxable estate, and donating appreciated assets avoids capital gains taxes while allowing a fair market value deduction. Donor-advised funds provide an immediate income tax deduction and let you support charities over time.
