How Much Can I Gift?
Many people are confused about gift tax, and the amount they can gift, tax free. This confusion typically arises when a loved one requires expensive skilled nursing care (sometimes at a cost of over $15,000 per month). Our Law Firm, during client consultations, often discuss the ability to legally “gift” money to trusted family members, tax free, and qualify for financial assistance through Medi-Cal for long term care. It is important to remember that California Medi-Cal rules are much different than Medicaid rules of different states.
In 2020 you can give up to $15,000 (the annual exclusion) to as many persons as you wish without owing any gift taxes. You don’t even need to file a gift tax return. You and your spouse together may make joint gifts up to $30,000 per couple, per year, to any number of individuals. Recipients do not pay tax on monetary cash gifts.
You can also give away over 11 million dollars in your lifetime or at your death, or a combination of both, without paying gift/inheritance tax. This limit changes frequently, so it is important to know the limits before making large gifts. The way the assets are gifted are critically important for Medi-Cal planning purposes, so never simply transfer or give away assets without advice from an Elder Law Attorney. The ability to transfer wealth or assets legally and without tax can be a big advantage when people are chronically ill, require long term care, and wish to protect their “nest egg” for their spouse or heirs by utilizing the Medi-Cal program.
For an appointment, please contact the McNamara Law Firm at 661-287-3260, or visit www.themcnamaralawfirm.com.
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