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May 13, 2024

Cynthia Brittain Weighs in on Tax Efficient Distribution of Inheritance in MarketWatch

Cynthia D. Brittain recently weighed in on a reader’s question in MarketWatch’s “The Moneyist” column where the letter writer asks how to gift her niece and nephew part of an inheritance while avoiding gift taxes and other costs.

The column explains that breaking up annual gifts under the federal gift tax exclusion allows you to gift installments of $18,000 not only to each recipient, but to each of their spouses and children while remaining exempt from gift taxes. As another solution, Cindy tells MarketWatch that in addition to making gift payments in installments, one can pay tuition expenses directly to the recipient's university or school, which would not count as a gift and therefore would not be taxed. 

“Higher education payments do not trigger any type of gift tax reporting,” Cindy shares. “The same applies for medical expenses as long as payments are made directly to the medical facility, if that is relevant or applicable.”

Read the full article as published MarketWatch (Subscription may be required):

My father ‘deliberately and hurtfully’ cut my late sister’s two kids out of his will. How can I ensure they get their fair share?

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