By Phillip B. Rarick, Esq. and Jay R. Beskin, Esq.
Last year the Federal annual gift tax exclusion was $15,000 and the amount remains the same for 2019. This means you can walk down the street and give out $15,000 to every person you meet and not have to file a gift tax return. If you are married, husband and wife can combine their annual exclusions and give $30,000 to each child or grandchild. As long as your gifts are below the annual exclusion amount, they are not counted against the lifetime gift exemption which is currently $11.4 million per person (Note: Be careful this is temporary and expected to drop to $5.6 million in 2026).
Note: Be very careful about making outright gifts to children. It is far safer to use a “Gifting Trust” so that the money is wisely used for the child’s college education or other needs – and so that the child does not blow it when he turns 18 or his creditors grab it when he is in his 20’s.