Page 10 THE REVERE ADVOCATE – FRIDAY, MAY 3, 2024 MASS HOUSE | FROM Page 1 “This budget takes a fi scally ADVANTAGES AND DISADVANTAGES OF MAKING GIFTS F or many taxpayers, making lifetime gifts can result in estate tax savings, particularly for those taxpayers residing in Massachusetts. No income taxes are paid when the donee of the gift receives the gifted property. Gifting may also allow you to shift income from the top income tax bracket of a parent to a lower income tax bracket of a child or other relative. When you gift to a child, you do have the benefi t of seeing your child enjoy the gifted asset during his or her lifetime. You can also get to see how well your child manages the money or other property gifted to him or her. By observing how a child is managing gifted monies, you can adjust going forward by either making additional gifts or by deciding to place property in a trust for the benefi t of a son or daughter. Gifting to a child may also offer some asset protection as it might serve to spread out the risk of losing assets. Of course, there cannot be a transfer in defraud of a creditor. A disadvantage to gifting is that you will no longer have legal title to the asset gifted away. The donor of the gift needs to be relatively certain that he or she will not need the asset going forward. Therefore, you should evaluate your fi - nancial needs and corresponding resources before you decide to gift away assets. Also, once in the hands of your child, the asset would be at risk for his or her creditors including his or her spouse in a divorce proceeding. You also have to consider whether or not making a gift to a child will take away the child’s incentive to make it on his or her own. It might not be such a good idea to give assets to children too soon. It is always good when children are a little bit hungry. It usually brings out the best in them. A sink or swim mentally takes over. As your children are older and more established, making lifetime gifts in Massachusetts will serve to reduce your taxable estate. Since there is no gift tax in Massachusetts, such gifts result in no gift tax and will escape estate taxation upon your death. Any taxable gift (i.e. gifts to any donee each year in excess of $18,000) will serve to reduce your Massachusetts $2,000,000 estate tax lifetime exemption for purposes of being required to fi le a Massachusetts estate tax return. If you gave $2million to your son Charlie during your lifetime and still had a $500,000 bank account in your name upon your death, the $500,000 would be taxed as part of your Massachusetts taxable estate because you still owned the $500,000 at the time of your death and you used up your $2million estate tax fi ling threshold exemption. Therefore, even though your gross estate was under $2million at the time of your death, all of the $500,000 would be subject to the estate tax. Many taxpayers do not realize this is how the Massachusetts estate tax works. However, giving away the $2million may very well have saved $99,600 in Massachusetts estate taxes. There is not too much concern with federal estate taxes for most people as the federal lifetime exemption is now over $13million for each decedent’s estate. However, if the 2017 tax act is not extended, the federal estate tax exemption will drop to approximately $6million come January 1, 2026. Also keep in mind whether you give directly to a child or to an irrevocable Trust, you do start the fi ve-year look back period for purposes of protecting assets as part of a Medicaid asset protection plan. Joseph D. Cataldo is an Estate Planning/Elder Law Attorney, Certifi ed Public Accountant, Certifi ed Financial Planner, AICPA Personal Financial Specialist and holds a Master’s Degree in Taxation. responsible approach to making meaningful investments in areas of significant need. I’m proud of the fact that the House’s FY25 budget allocates key funding to better support Massachusetts students and families, to increase access to aff ordable health care, and to provide for a safer and more reliable public transportation system,” said House Speaker Ronald J. Mariano (D-Quincy). “I want to thank Chairman Aaron Michlewitz and the entire House Committee on Ways and Means for crafting this budget, as well as all my colleagues in the House for their hard work and critical input throughout this process, a collective eff ort that has helped to produce a strong and responsible FY25 budget.” Due to responsible fi scal management, the House’s FY25 budget is balanced, and makes significant investments across a number of issue areas, without needing to draw from the Stabilization Fund, which is set to reach a record high of $9.053 billion. “I want to thank Speaker Mariano and Chairman Michlewitz for their leadership during this year’s budget process. I am proud of the House’s budget, Education Universal School Meals JESSICA GIANNINO STATE REPRESENTATIVE as it is fi scally responsible and makes key investments in transportation and aff ordable healthcare,” said Representative Giannino (D-Revere). “I am happy to have secured vital funding for the City of Revere in several important areas including educational programs, public safety, and repairs to our aging infrastructure that support our youth and seniors. I am thankful for the partnership and advocacy of Representative Turco in bringing this funding home.” “The FY25 House passed budget is a values statement. I am honored to have supported a budget that contains the largest investment in our educational JEFFREY ROSARIO TURCO STATE REPRESENTATIVE system in the Commonwealth’s history. In addition, working with my colleague, Rep. Giannino, the House budget contains signifi cant funding for important programs in Revere. This budget confi rms that teamwork benefi ts Revere,” said Representative Jeff rey Rosario Turco (D. Winthrop). The budget passed includes $1.3 billion in investments for transportation and education initiatives made possible because funding generated by the Fair Share ballot initiative that voters approved in November 2022, which established a surtax of 4 percent on annual income above $1 million. House’s FY25 Fair Share Investments Transportation $190,000,000 Commonwealth Transportation Fund Transfer $80,000,000 MBTA Capital Investments Child Care Rate Increase Minimum per Pupil Aid Income Eligible Waitlist Early Literacy MassReconnect Higher Education Capital Funding Targeted Scholarships Green SchoolWorks DHE Endowment Match $250,000,000 Child Care Grants to Providers $175,000,000 Regional Transit Funding and Grants $90,000,000 Financial Aid Expansion $75,000,000 $65,000,000 MBTA Workforce/Safety Reserve $65,000,000 $37,000,000 MBTA Academy $30,000,000 MBTA Resilient Rides $30,000,000 Roads & Bridges Supplemental Aid $25,000,000 $24,000,000 MBTA Means-Tested Fares State U’s SUCCESS Program $14,000,000 Water Transportation $10,000,000 $10,000,000 $10,000,000 $10,000,000 UMass Endowment Match $10,000,000 TOTAL $695,000,000 TOTAL Law Offices of JOSEPH D. CATALDO, P.C. “ATTORNEYS AND COUNSELORS AT LAW” ESTATE/MEDICAID PLANNING WILLS/TRUSTS/ESTATES INCOME TAX PREPARATION WEALTH MANAGEMENT RETIREMENT PLANNING ELDER LAW 369 Broadway Everett, MA 02149 (617)381-9600 JOSEPH D. CATALDO, CPA, CFP, MST, ESQUIRE. AICPA Personal Financial Specialist Designee $605,000,000 $40,000,000 $35,000,000 $20,000,000 $5,000,000
11 Publizr Home