If a person makes a gift over $13,000 to another person and then dies within 3 years, will the amount of the gift be included back in the estate and possibly be subject to federal and Massachusetts estate taxes?
I should add that the assets are held in a revocable trust if that makes a difference.
Real Estate Attorney
Only someone who is actually reviewing your specific estate or tax situation can give you a reliable answer. Generally, however, gifts made during the lifetime of the gift-giver must be included and calculated as part of their lifetime gifting total. Whether there will be any tax due depends entirely on the numbers. If you need assistance probating an estate, or discussing lifetime gifting strategies, you should reach out to an attorney.
4 lawyers agree
Wills and Living Wills Lawyer
The question is a bit ambiguous (is the donor holding them in trust for the recipient, or the recipient holding them in trust form him/herself or others), but in either case, the answer is is that all gifts, even those under $13,000, will be brought back into the gross estate.
Federally, if the decedent was the settlor of the trust, there was no completed gift, so all of the property in trust is treated as never having been given away. If all of the property was given away, section 2035 of the Internal Revenue Code brings the value of ALL property given away within three years of death, as well as any gift taxes paid on those gifts, back into the estate, then credits the gift taxes paid against the ultimate estate tax bill.
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