Another planning opportunity or 2012:making charitable gits
Choosing to git during lietime
while you are still living.
Reduce estate assets now
to avoid or minimize estatetaxes in the uture.
The git plus its uture appreciation is removed romthe estate o the donor.
Minimize income taxes now.
The giting o income-producing assets can shit the tax burden to amilymembers in lower tax brackets.
use certain valuation discounts
in transerringamily-owned businesses and arms.
For example, gits o closely held businesses may beeligible or signicant discounts in value, up to 30%in some cases, due to the act that these owner-ship shares are not readily transerable in the openmarket. This is considered a “lack o marketability”discount. Also, these gits may have limited rightsattached, which would trigger a “lack o control”discount.
Certain states tax estates but not gifts.
Lietime gitsmay help minimize certain state-imposed estate taxes.
Giting can shit assets to amilymembers with less creditor risk.
Donors lack control
over the assets ater the git has been completed, although trusts can help donorsmaintain some level o control over gited assets.
Loss of assets.
There is the possibility that there will be a uture need or assets previously gited to meetsignicant costs such as medical expenses, survivingspouse income needs, or helping settle uture estate-related costs.
Loss of step-up in cost basis
on appreciated assets at death. With giting, the recipient typically assumesthe original cost basis while heirs receiving assets at death generally assume date-o-death cost basis oninherited assets.
Potential for asset value(s) to decline
ater a git has been made.
federal estate tax may be repealed
in the uture.
This scenario may be unlikely due to the need or additional revenue to combat rising ederal budget decits.