Todd Lutsky explains why gifting assets isn’t as straightforward as it seems. Todd details how to protect assets you eventually want to use as gifts. Todd answers questions from listeners about their personal estate planning needs.

Todd E. Lutsky joined Cushing and Dolan, P.C. in 1995 initially concentrating on the preparation of estate plans, including the use of revocable trusts, joint trusts, irrevocable life insurance trusts, qualified personal residence trusts, and family limited partnerships. He has since expanded his practice to include business planning through the use of regular limited liability companies, Delaware series limited liability companies, the sale of assets to an intentionally defective grantor trust, cross-purchase agreements, stock redemption agreements, Deferred Compensation agreements, and the use of spousal lifetime access trusts. He has further expanded his practice to include Medicaid and asset protection planning for the elderly, assisting clients with the Medicaid application, preparation and eligibility process of obtaining MassHealth benefits, fair hearings, and advanced Medicaid planning and the preservation of assets through the use grantor irrevocable income only trusts. He is a member of the National Academy of Elder Law Attorneys, and the Boston Estate Planning Council, and is co-founder of the Boston Chapter of the National Aging in Place Council. Mr. Lutsky is a regular speaker for Massachusetts Continuing Legal Education, the Foundation for Continuing Education, the Massachusetts Association of Accountants, and the Mass Society of Enrolled Agents….(read more)

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Ask Todd: Gifting assets shouldn’t be complicated, but it is

Gifting assets to your loved ones may seem like a simple and straightforward process, but in reality, it can be quite complicated. There are many factors to consider, including tax implications, legal requirements, and the overall impact on your financial situation. This is why it’s important to seek professional advice when gifting assets, to ensure that you are making informed decisions and avoiding potential pitfalls.

One of the most common reasons for gifting assets is to reduce the size of your estate and potentially lower your estate tax liability. By gifting assets during your lifetime, you can pass on your wealth to your loved ones and reduce the overall value of your estate, which may have significant tax benefits. However, there are strict guidelines and limitations on how much you can gift each year without incurring gift tax. It’s important to consult with a tax professional to understand these rules and to ensure that you are gifting within the allowable limits.

Another important consideration when gifting assets is the impact on your own financial security. You want to make sure that you are not putting yourself in a precarious financial position by giving away too much of your wealth. It’s important to have a comprehensive understanding of your own financial situation and to consider the potential long-term consequences of gifting assets.

In addition to the tax and financial implications, there are also legal requirements to consider when gifting assets. Depending on the type of asset and how it is being transferred, there may be specific legal documents and processes that need to be followed to ensure that the gift is valid and legally binding. For example, real estate and certain financial assets may require specific legal documentation to transfer ownership.

Given the complexity of gifting assets, it’s highly recommended to seek professional advice from a financial advisor, tax professional, and/or estate planning attorney. These experts can help you navigate the complexities of gifting assets and provide guidance on the most effective and efficient ways to transfer your wealth to your loved ones.

In conclusion, gifting assets shouldn’t be complicated, but it often is. There are numerous tax, financial, and legal considerations to take into account when making gifts to your loved ones. Seeking professional advice is essential to ensure that you are gifting assets in a way that aligns with your goals and preserves your financial security. With the right guidance, you can navigate the complexities of gifting assets and make informed decisions that benefit both you and your loved ones.