As you grow older and collect more assets, you may feel it’s time to start setting up an estate plan and to choose your beneficiaries. If you have beneficiaries in mind, then it’s a good time to talk about how you’d like to pass on those assets.

There are a few ways that you can pass assets on to others. These include:

• Gifting the assets to the individuals while you’re still living
• Setting aside the assets in trusts
• Willing assets to your beneficiaries following your death

Each of these methods have their own benefits that you might consider but one that you may want to consider more is being able to give away your assets while you’re still living.

Why would you want to distribute your assets while you’re still alive?

One reason is that it can be beneficial for your taxes to do so. In 2019, you can give away up to $15,000 in assets to each individual who you’d like to consider as a beneficiary. If you give away more than $15,000, you’ll need to pay a gift tax, so it’s worth keeping the amount low.

There is an exclusion to consider as well. If you are married, that $15,000 limit jumps to $30,000 per person without having to file a gift return.

There is also the reasoning that it’s better to see how your gifts are being used while you’re still alive. You might be able to give away enough for a grandchild to go to college without debt, to see a child open a new business or just see someone you love go on an adventure they’ve been dreaming of.

If you want to learn more about estate planning and using the gift tax, our website has more information.