What is the primary purpose of making gifts in estate planning?

The primary purpose of making gifts in estate planning is to transfer assets without expecting anything in return. This practice allows individuals to distribute their wealth to family members or charitable organizations while they are still alive, rather than waiting until death. By doing so, individuals can reduce the size of their estate, which may help minimize estate taxes and facilitate a smoother transfer of assets upon passing.

Additionally, making gifts can strengthen personal relationships, allow beneficiaries to benefit from the assets sooner, and provide the giver with the satisfaction of seeing their loved ones or causes benefit from the gifts. This strategy is often utilized during estate planning to maximize the efficiency and impact of one's financial legacy.