Featured Article
Bursting Bubbles Create Estate-Planning Opportunities
Posted February 2009
Despite depreciated values in stocks, real estate, commodities, and most recently in the high-end art market, there is a silver lining also present: an opportunity to take advantage of depressed prices to carry out a lifetime program of making gifts to loved ones at a significant discount.
Because of the annual exclusion, an individual can now give up to $13,000 in 2009 (up from $12,000 in 2008) to each of as many donees as he or she chooses, completely free of federal gift tax. Let's say a year ago XYZ stock was trading at $100 a share. The annual exclusion of $12,000 would have allowed a donor to give a child 120 shares completely free of gift tax. Now with stock trading at $65 a share, a donor would be able to give 200 shares of XYZ free of gift tax.
This gift analysis extends to other types of property as well. Perhaps one of the most effective applications of this strategy is with a closely held business interest, the effective control of which a parent wants to transfer to an heir apparent—assuming of course that the business value has declined during this economic downturn.
Please give us a call to discuss potential charitable gift options that could be beneficial to you and your family in these trying times.
