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Tis The Season for Gifting: Westchester Elder Law Attorney

Anthony J. Enea Sheds Light on the Tax Implications
Westchester County, N.Y. (December 19, 2022) – With the holiday season in full swing, many parents and grandparents are deciding whether to make significant monetary and/or property gifts to their children, grandchildren and other loved ones. Westchester County elder law and estate planning attorney Anthony J. Enea, Esq., managing member of Enea, Scanlan & Sirignano, LLP in White Plains and Somers, N.Y., recently shared his insights on gifting and the potential tax implications.

“For those considering making a sizable gift, one issue is whether doing so will result in any taxes being paid by either the gift giver and/or the recipient,” said Anthony Enea, who has spent 35 years protecting the rights of seniors, the disabled and their families. “With the possibility that the existing federal estate and gift tax exemption may be reduced from $12.06 million to $6 million as of January 1, 2026, the decision becomes even more important for high-net-worth individuals. Additionally, the recent drop in the value of one’s stocks and other assets creates the opportunity to give away potentially appreciating assets at a time they are of lower value. Thus, reducing the amount of one’s exemptions that needs to be used.”

Currently, a person can gift up to $16,000 per recipient per year free of any gift taxes ($17,000 in 2023). Even above that threshold, filing a federal gift tax return doesn’t necessarily mean that the gift giver will have to pay any gift taxes. He or she will be able to apply his or her exemption for federal estate and gift taxes to the amount of any gift above the $16,000 or $17,000 in 2023 per recipient in any calendar year.

“If a single, non-married person makes a gift of $100,000 in 2022 to his or her son or daughter, $16,000 of the gift is tax free and $84,000 would be subtracted from the gift giver’s federal exemption amount of $12.06 million for federal estate and gift taxes,” Enea explained. “If he or she is married, their spouse can join in on the gift and reduce the taxable amount of the gift to $68,000, and only $32,000 would be subtracted from the lifetime credit.”

The $12.06 million federal estate and gift tax exemption ($12.92 million per person in 2023), which expires at the end of 2025 unless made permanent by law, creates an ideal opportunity for individuals to remove highly appreciating assets from their taxable estate. It’s also a way of reducing the assets one owns that may be subjected to his or her long-term care costs and future estate taxes.

In addition to the tax implications, another consideration is whether a gift should be made outright or through a trust. This decision often involves a number of factors such as the age of the recipient, his or her ability to appropriately manage financial affairs, and spending habits.

“The use of an irrevocable trust agreement is a prudent way of gifting and managing assets for a loved one,” noted Enea. “Unless one is making a relatively small gift and there are no concerns as to the recipient squandering or wasting said monies, an outright gift may not be appropriate. In most other instances, the use of a trust to hold the gift is a much wiser option.”

An “AV” Rated Preeminent Attorney (Martindale-Hubbell) and strong leader in Westchester’s legal community, Mr. Enea is a past president of the Westchester County Bar Association, immediate past president of the Westchester County Bar Foundation and past chair of the Elder Law and Special Needs Section of the New York State Bar Association. His practice areas include wills, trusts & estates, elder law; Medicaid asset protection planning; Medicaid applications (home care and nursing home) and special needs planning.

Enea, Scanlan & Sirignano, LLP is located at 245 Main Street in White Plains, N.Y. with additional offices in Somers, N.Y. For more information or to schedule a consultation, call 914-948-1500 or visit www.esslawfirm.com.

About Enea, Scanlan & Sirignano, LLP
Enea, Scanlan & Sirignano, LLP is an eight attorney AV preeminent rated elder law firm with offices in White Plains and Somers, N.Y. The practice concentrates on Elder Law; Medicaid Planning; Nursing Home and Home Care Applications; Wills, Trusts and Estates; Guardianships; Estate Litigation; Supplemental Needs Trusts; and Special Needs Planning. Enea, Scanlan & Sirignano, LLP serves Westchester, Rockland, Putnam, the Bronx, Manhattan, Long Island and Queens and is committed to providing the highest quality legal services to seniors, the disabled and their families. Visit the firm online at www.esslawfirm.com.

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Anthony J. Enea
Elder law attorney Anthony J. Enea, managing member, Enea, Scanlan & Sirignano, LLP