I've discussed 'Mega Gifting' a lot lately, mostly because the unique opportunity to pass a large amount of money to your loved ones, tax free, will be lost on January 1, 2013. Until then, this large gift will be available to every one you love…well almost.
Many of you already knew that an individual may make unlimited lifetime or post-death transfers of property to a spouse free of estate and gift taxes- unless the recipient spouse is a non-citizen., Fact is, the tax free exemption for the non-citizen spouse is limited to $133,000 per year.
Let’s look at example of exactly how this works. Jack and Jill are a married couple who hold title to their primary residence as joint owners. Sam is a successful obstetrician who loves delivering babies but can’t afford another increase in his medical malpractice insurance. Sam decides to title the home solely in Sue’s name. In that way, even if the worst happens and he is sued, the couple and their family will still have a roof over their heads. If both Jack and Jill are U.S. citizens no adverse tax consequences result. However, if one spouse is a non-citizen, a taxable gift may very well occur simply by altering title to the home.
If you are interested in a more details on this topic as well as many others, please go to the homepage on my website and download the free report entitled “Estate Planning Issues for the Non-Citizen Spouse”.