Gift taxes are taxes that supplement the Estate Tax. Gift taxes are placed on gifts given away to any person while you are still living, so that you may not avoid estate taxes by making gifts of your estate. You may give up to $12,000 a year in cash or assets to an unlimited number of people each year without incurring gift tax liability, but the gifts must have no conditions attached. Married couples can give, as a couple, a $24,000 gift per year to as many people as they want. Under federal tax law, gifts totaling more than $12,000 to one person in one year are considered a taxable gift and generate a potential gift tax. It does not matter if you give one $13,000 gift or 13 gifts of $1,000 each, or one gift of $12,000 and a "birthday gift" of $1,000.
Gifts beyond the $12,000 limit (there is an exception for gifts that are directly paid by the gift giver for tuition and medical expenses) are considered "taxable gifts." Taxable gifts create liability for a gift tax. But gift tax is not due to be paid until you give away over $1,000,000 in your lifetime.
The South Dakota Declaration of Gift of Cash over Period of Years with Splitting of Gift with Spouse is a legal document that outlines the terms and conditions for gifting cash over a specified period, while also allowing the option to split the gift amount with a spouse. This declaration is an essential tool for individuals who wish to make substantial financial gifts and would like to do so over a period of time. One type of South Dakota Declaration of Gift of Cash over Period of Years with Splitting of Gift with Spouse is the "Irrevocable Declaration." This type of declaration solidifies the commitment to gift a specific amount of cash over a designated period, with the understanding that it cannot be altered or revoked once signed. This can be useful for those who want to make a long-term financial commitment. Another type is the "Revocable Declaration." This declaration allows for flexibility, enabling the option to change or modify the terms of the gift even after it has been initially declared. This can be beneficial for individuals who anticipate changes in their financial circumstances or wish to maintain more control over their assets. The "Splitting of Gift with Spouse" aspect of the declaration permits the option to divide the gift amount between the declaring and their spouse. This is advantageous for married couples who want to jointly contribute to the gift fund, ensuring equal involvement and potential tax benefits. By employing the South Dakota Declaration of Gift of Cash over Period of Years with Splitting of Gift with Spouse, individuals can effectively plan their financial contributions, establish legal obligations, and protect the intended purpose of the gift. It is essential to consult with an experienced attorney specializing in estate planning and tax laws to ensure compliance with relevant regulations and maximize the potential benefits of such a declaration.
