What gifting strategies can shrink a taxable estate?
Several legal moves reduce the size of a taxable estate while you're alive. The simplest is annual exclusion gifting: $19,000 per recipient in 2025 (or $38,000 from a couple), repeated yearly to children and grandchildren, which moves wealth out tax-free without touching your lifetime exemption. Direct payments of someone's tuition or medical bills, made to the institution, are unlimited and don't count at all. Larger lifetime gifts use your exemption (about $13.99 million in 2025) and, importantly, remove future appreciation from your estate – give an asset likely to grow and all that growth escapes estate tax. Funding 529 plans, charitable gifts, and trusts also shifts value out. The estate-tax exemption is set to drop after 2025, so large gifters may want to act while it's high. These strategies matter mainly for very large estates. See wealthserene.com/goals/leave-a-legacy.
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