To Give Or Bequeth? That Is The Que$tion! / Overland Park, KS

As any estate planner will tell you, giving assets away to your heirs is all about how and when. There are many times to give, and many ways to do it, and every method has its own advantages depending upon the concern. So it is with the age old question of whether it is better to give or bequeth.

A meaningful planning question many are asking in Overland Park and elsewhere is whether it is best to maximize your lifetime gifting strategy now that the lifetime maximum gift tax exemption is $5.34 million.

Not too long ago, the primary concern was the estate tax. The strategy was to gift during life using the annual gift tax exclusion, currently $14,000 per donee per year. After all, gifting let you incrementally slide under your stuff under that onerous estate tax ceiling.

However, with the more favorable estate and gift tax exemptions (both are a unified $5.34 million), many planning their wealth transfers are reassessing their strategies. This sentiment was captured in a recent article in The Slott Report titled “Gifting-During-Life Strategy: Does It Make Sense for YOUR Family?”

Why might one elect to use lifetime gifting rather than a bequest at death?

One notable concern is that gifting does not offer the “stepped-up basis” of a bequest.

Then again, it may be extremely advantageous to use a present gift to shift radical future appreciation down to the next generation.

This kind of leverage can be powerful.

The original article provides an even handed analysis of the benefits and detriments of each approach. Like anything in wealth transfer planning, the unique circumstances of each case will dictate the most favorable alternative.

It is a complex dilemma worth examining. Does the gifting-during-life strategy work for your family? Do bequests make the more sense? And finally, is there an even further solution necessary to accomplishing your goals? Make sure you explore your options with competent estate planning counsel.

Remember: “An ounce of prevention is worth a pound of cure.” When making your financial, tax and estate plans, do not go it alone. Be sure to engage competent professional counsel.

For more information about estate planning in Overland Park, KS (and throughout the rest of Kansas and Missouri) and to download free tools to help you organize your estate, visit my estate planning website.

Reference: The Slott Report (February 28, 2014) “Gifting-During-Life Strategy: Does It Make Sense for YOUR Family?”