Make Sure Those Year-End Gifts Are Truly Made

6:15 pm Asset Protection, Estate Planning, Tax Planning

2012 150x150 Make Sure Those Year End Gifts Are Truly MadeA timely Financial Planning article reminds us that the timing of making year-end gifts is important because a transfer of property is only counted as a gift once a donor has unconditionally relinquished all control over it.  Here are the rules concerning gifts:

Gifts by Check – the check must be cashed or deposited into the recipient’s account by Dec. 31 to count as a 2011 gift, so if you have given a gift via check, be sure the recipient follows through by cashing or depositing the check before the end of 2011.

Gift of Securities – the securities must be physically transferred into the recipient’s account by year-end.

Large Gifts – gifts above the $13,000 annual exemption count toward your lifetime exemption, which is $5 million in 2011 and $5.12 million for 2012.  The gift exemption could potentially revert back to $1 million in 2013, so you should consult with a California estate planning attorney about the tax consequences of gifting more than $13,000.

Charitable Gifts – if you are making a donation by check, it must be mailed by Dec. 31.  If you are making a donation via credit card, you must also make it by Dec. 31, even though you will not pay for it until 2012.

Happy New Year to our clients, friends and readers!  We look forward to providing you with more estate planning insights in 2012.

Help is available to you by contacting your Southern California financial planning experts today.

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