What You Need to Know About Gifting Trusts

Smart gifting strategies—including trusts—can help you pass on wealth while minimizing gift and estate taxes.

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It always feels good to give to those you love. But gifting large amounts may raise some unintended tax consequences. Luckily, there are many ways you can minimize the hit or avoid it all together. One way is by establishing a trust. This is a legal entity that holds assets for the benefit of others.

There are several types of trusts out there, each with different benefits. But before we explore these options, it’s best to understand the basic tax implications of gifting.

Gift and Estate Tax Exclusion

For 2025, you can give up to $19,000 in assets like cash or stocks to any individual or entity without triggering any tax implications. A married couple can double that to $38,000. So, for example, a married couple can give up to $38,000 each to their daughter and grandson without getting the attention of the Internal Revenue Service. This is what’s known as the annual gift tax exclusion.