Founding Attorney
Giving during your lifetime isn’t just thoughtful—it can also be a smart move for your estate plan. Certain types of gifts can reduce the size of your taxable estate and help your loved ones now rather than later. At Kallio Law Firm, LLC, we guide Louisiana families through practical, tax-friendly strategies that match their long-term goals. Whether you’re looking to support your children, help a grandchild through college, or move assets out of your estate, we can help you explore options that make sense for your situation.
Annual Exclusion Gifts
One of the simplest ways to reduce your taxable estate is by making annual exclusion gifts. The IRS allows you to give up to $19,000 per person per year (as of 2025) without triggering the gift tax. If you’re married, you and your spouse can combine your exclusions and give up to $38,000 per person.
These gifts can go to:
- Children and grandchildren
- Friends or extended family
- Anyone else you’d like to support
You don’t need to file a gift tax return if you stay within the limit. Over time, this strategy can significantly reduce the value of your estate. It also lets you help your loved ones now, when they may need it most—whether they’re saving for a home, building a business, or raising a family.
Lifetime Gift and Estate Tax Exemption
In addition to the annual exclusion, there’s also a lifetime exemption. In 2025, each person can give away up to $13.99 million during their lifetime or at death before federal estate or gift taxes apply. That number may change in the future, but for now, it gives you a chance to transfer significant wealth tax-free.
Louisiana does not have its own estate or gift tax, which means the federal rules are the only limits to consider. That can make lifetime gifting an even more attractive option for Louisiana residents.
You can use your lifetime exemption to make larger gifts beyond the annual limit. For example, you might want to help a child buy a house or transfer ownership of a family business. While these gifts require filing a gift tax return, they won’t cost you in taxes as long as you stay under the exemption amount.
Gifting to 529 Plans and Educational Expenses
If you want to support a child’s or grandchild’s education, 529 college savings plans are worth considering. These accounts grow tax-free and can be used for qualified education expenses.
Here’s how they can help reduce your taxable estate:
- You can contribute up to five years’ worth of annual exclusion gifts at once
- That means up to $95,000 per beneficiary (or $190,000 if you’re married)
- The gift is removed from your estate, even though it’s used over several years
Another option is to pay tuition directly to the school. When you make payments directly to an educational institution, those amounts aren’t treated as taxable gifts at all, no matter the size.
Gifting to Irrevocable Trusts
An irrevocable trust can be a powerful tool for larger gifts, especially when you want some structure or protection around how those gifts are used. Once you place assets in an irrevocable trust, they’re generally no longer counted as part of your taxable estate.
These trusts can be useful if you want to:
- Provide for children or grandchildren over time
- Keep assets shielded from creditors or divorce
- Avoid large one-time transfers
You can also gift a life insurance policy to an irrevocable trust, which removes the death benefit from your estate while ensuring the proceeds go to your chosen beneficiaries. At Kallio Law Firm, LLC, we can help you decide if a trust fits your goals and design it around your family’s needs.
When to Start and How We Can Help
The best time to start planning your gifting strategy is now. Whether you’re thinking about small annual gifts or a larger transfer, getting an early start gives you more flexibility. And the earlier you act, the more you can take advantage of what the law allows.
At Kallio Law Firm, LLC, we’ll sit down with you to understand your goals, review your financial picture, and build a plan that works for you and your family. If you’re ready to explore how lifetime gifts can help reduce taxes and support the people you care about, contact us today. We’re here to help every step of the way.
