2010 The Year of the Gift?

1:03 pm Uncategorized

According to a Reuters article, many financial planners are urging wealthy clients to give assets away to children and grandchildren, calling 2010 “the golden era” for gifting assets.


The estate tax is still gone for 2010 and taxes on generation-skipping transfers were also eliminated this year.  However, next year both come back – the estate tax at a higher 55 percent rate and the generation-skipping transfer tax at up to 55 percent.  Moving assets out this year through tax-free gifts, intra-family loans and trusts makes sense the more the clock runs out on 2010 and Congress does nothing to reinstate a retroactive estate tax – which many experts say will not happen.

However, Congress is expected to make a move on the GRAT, or grantor-retained annuity trust.  Currently, you can transfer any assets that are expected to rise in value to a GRAT and receive payments for a minimum of two years.  Gains in the GRAT assets go to beneficiaries tax-free.  Congress is expected to start making some distributions taxable and extend the minimum term to ten years.

Gift taxes fell to 35 percent this year, from 45 percent in 2009, but will vault back up to 55 percent in 2011.

If all this uncertainty has your head spinning, contact our California asset protection law firm for help in developing the perfect estate plan for your family and these uncertain times.

Contact us today for individualized planning strategies to meet your unique needs.

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