Estate Planning and Gifts: What You Should Consider

When you are beginning to think about estate planning and the people to whom you want to leave your assets, you might be thinking about giving one or more assets to some of your loved ones right now. In other words, there may be certain assets that you want to gift to your adult child or to another loved one in your lifetime because you do not want them to have to wait until your death to inherit the asset. If you are planning to give any kind of substantial gift, it is essential to discuss these plans with your estate planning lawyer. There are a couple of major considerations that you will want to take into account before you gift assets, including the federal gift tax, as well as the Medicaid “look back” period for long-term care purposes. Our Gwinnett County estate planning lawyers can explain in more detail.

Federal Gift Tax and Its Implications 

If you gift more than a certain amount (or assets of a certain value) each year, you can be subject to a federal gift tax. There is no Georgia state gift tax, but there is the federal gift tax to consider.

As of 2025, up to $19,000 can be given without requiring gift tax reporting and payment. In other words, up to $19,000 per year is exempt from the gift tax, and that amount doubles for a married couple. Anything over $19,000 will be subject to the gift tax, and the specific tax amount will depend on the amount given and the party to whom it was gifted.

Medicaid Planning and the “Look Back” Period in Georgia

Another very important consideration before giving a substantial gift (or any moderately sizable gift) to a loved one is the “look back” period for Medicaid eligibility purposes in Georgia. While many adults do not realize this, Medicaid — the federal program for people with limited assets and income — is the primary source of payment for long-term care in a nursing home unless you are very wealthy and can afford to cover the high costs of multiple years of long-term care yourself. For most middle-class and even upper middle-class residents of Gwinnett County, you will want to be able to have Medicaid pay for your long-term care if you need it.

In order to qualify for Medicaid, you should engage in Medicaid planning with an estate planning lawyer. Part of this process involves paying attention to Georgia’s “look back” period, which is 60 months. What this means is that Medicaid will look back 60 months (5 years) from the date you need Medicaid coverage. Any gifts made during that time can affect your Medicaid eligibility because they can look like attempts to avoid having to spend down assets for Medicaid coverage, and you can be penalized. You can avoid such concerns by working with an estate planning lawyer on Medicaid planning and making gifts.

Contact a Norcross Estate Planning Attorney 

If you are planning to give money or other assets to a loved one, it is important to understand how the gift tax works and whether you will need to anticipate an additional tax associated with any gift. These are issues that estate planning attorneys handle regularly for clients in Georgia, and an experienced Norcross estate planning lawyer at Bowman Law Firm can speak with you today about gifting assets and considering whether and how you may be impacted by the federal gift tax or penalized in the event you need long-term care. Contact us today for assistance.

Sources:

irs.gov/businesses/small-businesses-self-employed/gift-tax

kiplinger.com/taxes/gift-tax-exclusion

aging.georgia.gov/document/document/medicaid-information-long-term-care-2017pdf/download