Gifting is a powerful and thoughtful way to manage your wealth while providing lasting benefits to your loved ones and the causes that matter most to you. For individuals and families involved in St. Augustine high net worth planning, gifting can reduce estate taxes, support charitable goals, and transfer wealth more efficiently. When aligned with your estate plan, it offers peace of mind and a meaningful legacy.
What Is Gifting in Estate Planning?
Gifting involves transferring property, funds, or other assets to another person without receiving anything in return. These gifts can take many forms, including cash, appreciated stock, real estate, or even the forgiveness of a loan. High-net-worth individuals often use gifting to gradually pass wealth to children, grandchildren, or charities.
Federal law allows individuals to gift up to $19,000 per recipient per year in 2025 without triggering gift taxes. Married couples can combine their exclusions, allowing gifts up to $38,000 per recipient annually. This strategy helps reduce the size of a taxable estate while avoiding gift tax reporting when within the annual exclusion limit.
Why Consider Gifting as Part of High Net Worth Planning
Gifting can play a key role in long-term estate planning strategies, especially for those in St. Augustine with large estates. It provides several advantages:
- Reduce estate taxes: By transferring assets during your lifetime, you lower the total value of your taxable estate.
- Leverage lower tax brackets: Gifting appreciated assets to recipients in lower tax brackets can reduce overall capital gains tax liability when those assets are eventually sold.
- Avoid capital gains taxes: Donating appreciated stock or property to charities allows you to avoid capital gains taxes and still receive a charitable deduction based on the asset’s fair market value.
- Control how wealth is used: With proper planning, gifts can be structured through trusts to ensure responsible use and protection of assets.
Understanding the Gift and Estate Tax Exemptions
In addition to annual exclusions, the federal government offers a generous lifetime gift and estate tax exemption. In 2025, this limit stands at $13.99 million per individual. Gifts made above the annual exclusion amount are applied against this lifetime exemption.
It’s important to note that the donor—not the recipient—is responsible for any gift taxes owed. However, most people won’t need to pay gift tax due to the high exemption amount. Keeping records and filing IRS Form 709 when required is essential, especially for gifts involving future interests, spousal transfers, or gifts to non-U.S. citizens.
Should You Gift Now or Later?
There are strategic reasons to gift assets now rather than waiting. For instance, appreciated assets given during life carry the original cost basis, which may result in capital gains taxes for the recipient. In contrast, assets passed through inheritance typically receive a step-up in basis, eliminating capital gains taxes for heirs at the time of transfer.
To balance these considerations, many high-net-worth individuals gift certain assets now while retaining others to pass on after death. An estate planning attorney can help determine the most tax-efficient approach for your specific circumstances.
Charitable Giving Strategies for St. Augustine Donors
If charitable giving is part of your estate plan, consider donating appreciated assets such as stock or real estate directly to a nonprofit. This approach allows you to:
- Avoid capital gains taxes.
- Receive a deduction for the full fair market value.
- Support your favorite causes with maximum impact.
You may also want to explore tools like Charitable Remainder Trusts (CRTs), which allow you to retain income from donated assets during your lifetime, or Donor-Advised Funds (DAFs), which offer flexibility in distributing gifts over time.
Work With a Trusted St. Augustine Estate Planning Attorney
Every gifting strategy should align with your broader estate plan to ensure it meets your personal goals and complies with current tax laws. At E.P.P.G. Law of St. Johns, we provide personalized guidance for individuals and families navigating St. Augustine high net worth planning. Whether you’re considering lifetime gifts, charitable giving, or trust-based strategies, request a consultation for help protecting your wealth and preserving your legacy.
Reference: Charles Schwab (December 13, 2024) “Tax-Smart Ways to Gift Highly Appreciated Assets”