In this episode, I tackle key questions about estate tax and gifting strategies, highlighting the importance of proactive planning to pass wealth to future generations. Annual gifting is one of the simplest ways to remove money from your taxable estate without reducing your lifetime exemption per spouse. I clear up common misconceptions, such as the belief that gifts over $18,000 are taxable (they aren’t; they simply require reporting and reduce your lifetime exemption) and that recipients of gifts or inheritances owe taxes (they generally do not). I also discuss exceptions, like direct payments for educational or medical expenses, which don’t count toward gift limits and can be powerful tools for gifting. I wrap up by encouraging you to start thinking about your legacy and taking action now, especially if you’re a business owner or high-income earner. Tax laws can always change, so staying proactive now can help protect your family and create a lasting impact. Thanks for listening, and I’ll see you next year!

Key Takeaways:

• Be sure to keep track of and report your untaxed gifts. This is important to ensure they don’t end up counting against your lifetime exemption.

• Always get up to date with your state and local laws, and know how they interact with federal regulations.

• Wealth can come faster than you think. High earners in their 30s and 40s may end up surprised, and should keep an active plan for themselves and their heirs.

• Legislation changes. Wealth transfers are favored today, but the law may not always read that way. Active planning will help you leave something behind.

Key Timestamps:

(00:00) - Understanding Estate Tax and Annual Gifting

(01:03) - Historical Context of Estate Tax Exemptions

(02:00) - Current Estate Tax Exemptions and Future Considerations

(03:50) - Annual Gift Tax Exclusion Explained

(08:08) - Misconceptions and Reporting Requirements

(10:30) - Exceptions to Gift Limits

(11:45) - Conclusion and Final Thoughts

(13:16) - Closing Remarks and Resources

Key Topics Discussed:

BLUF Veteran Finance Podcast, Military Finance, Veteran Financial Planning, Military Money Management, VA Benefits, Military Retirement Planning, Financial Literacy for Soldiers, Military Budgeting Tips, Debt Management for Service Members, VA Loans, Military Investment Strategies, Saving for Deployment, Thrift Savings Plan (TSP), Transitioning to Civilian Life, Military Tax Benefits, Financial Independence for Veterans, Military Money Manual, The Military Money Show, Estate Planning, Wealth Transfer, Estate Tax, Gift, Financial Gifts, Tax Write Off

Mentions:

• IRS Form 709: https://www.irs.gov/forms-pubs/about-form-709

• State Estate Taxes: https://taxfoundation.org/data/all/state/estate-inheritance-taxes/

More of Baskin Financial Planning:

Download the Ultimate Military Finance Checklist⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠, with 7 pages of critical things to be thinking about to clarify your journey to financial freedom.

Think you might need some financial help? ⁠⁠⁠⁠⁠Book an intro call with me to see if we would be a mutual fit.

Questions or comments, drop me a note at: erik@baskinfp.com

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