November 26, 2020

Volume X, Number 331


November 25, 2020

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November 24, 2020

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Making Gifts

The easiest way to ensure use of the high federal transfer tax exemptions available in 2020 is to make lifetime gifts. By making a gift, you are able to capture the current high gift tax exemption and remove future appreciation of the gifted asset from your estate.

Many clients will utilize a trust to be the recipient of the gift and several of those trusts are outlined here. However, some clients may decide against the use of trusts and give assets outright to the intended beneficiaries. Outright gifts provide absolute control to a beneficiary, but give up asset protection, management of the asset and possible income tax planning that may be available with irrevocable trusts.

Please keep in mind that a done takes the donor’s tax basis in a gifted asset, so cash gifts may work better than gifts of low basis assets. Also preferred are interests in high basis assets that qualify for valuation discounts, such as a minority interest in a family business or a vacation home. 

Clients are encouraged to take full advantage of the annual gift tax exclusion, currently $15,000 per recipient (or $30,000 per recipient for married couples), which allows clients to make gifts up to this amount to an unlimited number of receipts and to move the value of all such gifts out of his or her taxable estate without using any gift tax exemption.

© 1998-2020 Wiggin and Dana LLPNational Law Review, Volume X, Number 280



About this Author

Michael Clear Estate and Trust attorney Greenwich Wiggin and Dana

As a Partner in the firm's Private Client Services Department, Michael regularly counsels clients on the far-reaching financial implications of estate planning, estate and trust administration, probate litigation, and business succession planning. Yet he is also a trained counselor with insight into the family dynamics these matters can effect. Known for his empathy and good humor, he helps clients take prudent action in the face of indecision, hopefully resolving contested issues before litigation.

Michael's estate planning practice includes assisting individuals and families in...

Leonard Leader Tax lawyer Wiggin Dana

Len has decades of experience helping clients solve tax and estate planning challenges so they can build their wealth and bequeath it to younger generations. He serves as Partner and Chair of the Private Client Services Department at Wiggin and Dana. Len advises clients on estate and probate law, tax planning, elder law, and family business succession planning.

Len is a nationally recognized trust and estate lawyer. Worth Magazine has named him one of "Top 100 Trust and Estate Lawyers" in the country. Chambers High Net Worth recognized Len in ...

Veronica Bauer Estate Planning Attorney

Veronica R.S. Bauer is a Partner in the firm's Private Client Services Department in Palm Beach, Florida. Veronica focuses her practice on estate planning, estate and trust administration and charitable planning and administration.

Her practice includes assisting individuals and families with tax-efficient and practical estate, gift and income tax planning. She also assists fiduciaries and beneficiaries through estate settlement and trust administration matters

Robert Benjamin Estate Planning Attorney Wiggin and Dana

Bob has over three decades of experience as an estate planning and probate lawyer and previously served as Chair of Wiggin and Dana's Executive Committee (2009–2015). He is a Partner in the Private Client Services Department and counsels foreign and domestic clients in matters relating to estate planning, probate, and the taxation and administration of trusts and estates. He often works with clients who have complex estate planning needs, such as family business owners and artists. He is also a resource to lawyers at other firms in situations where difficult family dynamics or complex...

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Karen Clute Tax attorney New Haven Wiggin and Dana

Karen is committed to helping clients navigate ever-changing tax and fiduciary rules. As a member of the firm's Private Client Services Department, Labor and Employment Department, and Philanthropy Practice Group, Karen has a wide-ranging practice grounded in a deep understanding of the intersections of personal-, community-, and employment-related tax, fiduciary, and financial concerns.

She advises individual clients about a broad range of estate planning issues, with an emphasis on estate and income tax planning. She works with executors and trustees on fiduciary matters and...