End-Of-Year Tax Planning: Guidelines and Reminders for Annual Gifts

For 2025, each individual can give $19,000 per year to each person, without adverse estate or gift tax consequences and without reducing your unified gift tax credit (the $13,990,000 lifetime exemption from gift taxes). Therefore, a married couple may transfer up to $38,000 in the aggregate to each beneficiary per year. Obviously, these gifts would reduce the size of your estate, resulting in lower future estate taxes. Special care must be taken for gifts to minors.

Gifts can be of cash and any other asset (or portion of an asset). If a gift is made in property other than cash, the donee will take the property with an income tax basis equal to yours and you generally will not incur a capital gain on the gift. The annual gift tax exclusion is non-cumulative: gifts not made during the calendar year may not be carried over to a later year. Therefore, you should use the opportunity each year to make appropriate gifts.

Also, you may pay an unlimited amount for any individual directly to the:

(a) service provider for medical expenses; and

(b) educational institution for tuition expenses (but not room, board or supplies).

These payments are not even subject to the $19,000 annual gift limit. Obviously, these transfers would reduce the size of your estate, resulting in lower future estate taxes.

Please contact us to learn more about this opportunity, so that we can discuss the potential impact of lifetime gifts on your estate plan.
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About JMBM Trusts & Estates Group

JMBM’s Trusts & Estates Group focuses on estate planning, wealth transfer planning, trust administration and the resolution of trust disputes. Our Firm has one of the most active trusts and estates practices in California and our clients include individuals and families, and their business interests.

This update is provided to our clients, business associates and friends for informational purposes only. Legal advice should be based on your specific situation and provided by a qualified attorney.