Be Generous Now, Not Just When You Are on Death’s Doorstep
New York City’s reputation for misanthropy is largely undeserved. Everywhere you go, you see smiling faces. All the people you know and love live in New York. Yes, the young people walk fast, but they will slow down to let an elderly slowpoke board the subway. Sometimes, though, it makes sense that the voice and personality of Oscar the Grouch are based on a real New Yorker, a grumpy taxi driver who transported the Muppeteer who voiced Oscar during the early history of Sesame Street. If you need evidence of New York’s mean streak, just look at the mean-spirited laws about cash gifts. Federal law makes it so that you can give away cash gifts of upwards of $10,000 each to as many recipients as you choose, and do it all again next year and then for as many years as you are still healthy enough to sign a check, and you will never have to pay taxes on it unless you are fabulously wealthy, wealthier than anyone who has ever ridden in a taxi with a grouchy cab driver. For help making peace with New York’s mean-spirited cash gift laws, contact a Bronx estate planning lawyer.
Probate Law Assumes That Gifts That the Decedent Gave in His or Her Last Three Years Are Still Part of the Estate
In general, giving cash gifts that you know you can afford to give is a wise estate planning strategy. The annual gift tax exclusion for 2026 is $19,000 per recipient. You can give your children $19,000 each this year, or any amount less than that amount that you can afford to give. This way, they can receive part of their inheritance now and part of it when your estate settles. Some people do this year after year with multiple family members. Most of the time, there are no negative consequences; even the biggest worry wart who manages to catastrophize about almost everything would be hard pressed to think of any.
Leave it to New York to shut the party down. According to New York law, cash gifts that the decedent gave away during the last three years of his or her life still count as part of the estate. They still count as part of the estate’s property, so the estate still has to pay taxes on them. This means that, if Grandpa was always generous, and he continued to be equally generous after his malignant mesothelioma diagnosis two years before his death, that’s tough luck for the estate. This is unfair for him and equally unfair for people who die unexpectedly and for their families. The best possible response to this is to start giving cash gifts now.
Schedule a Confidential Consultation With a Bronx Estate Planning Attorney
An estate planning lawyer can help you be strategic about giving cash gifts to reduce your tax burdens and be generous to the people you love. Contact Cavallo & Cavallo in the Bronx, New York to set up a consultation.
Source:
farmoffice.osu.edu/blog/tue-02172026-710pm/2026-gift-tax-exclusions#:~:text=For%202026%2C%20the%20federal%20annual,their%20federal%20estate%20tax%20exemption.