Estate planning in tough times

One of the few benefits of hard times is the opportunity to make large tax-free estate planning transfers. In any tax year you can transfer $13,000 of cash or property to each of any number of individuals. If you have five children, you can make five $13,000 transfers. If your spouse joins in the gift, you can give $26,000 each year to each donee. If you have a long-term concern about passing your estate to your children, grandchildren or others and if the value of your company is depressed as a result of economic conditions this year, this could be a good time to make a gift or series of gifts, usually in the form of minority stock interests in a corporation, to your potential heirs. Each gift is valued the year you make it, and if you think the value of the company is going to go up when times improve, you can effectively transfer not only the present value but all of the future growth free from gift or estate taxes.

Disclaimer: This blog is a highly simplified general discussion. It is not legal advice. Such advice should come solely from qualified legal counsel who understands your situation and who is familiar with all relevant facts, variations in state and local laws that may apply to you, and other matters beyond the scope of this blog.

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