Annual gifts: A smart way to transfer wealth

November 2013


For several years, substantial uncertainty has existed in the estate and gift tax area. Until the end of 2012, the estate and gift exemption and tax rates after 2012 were unknown. This uncertainty prompted many individuals to make substantial gifts and to take advantage of the increase in estate and gift tax exemption from $1,000,000 to $5,000,000. At the close of the 2012 tax year, the American Individual Relief Act of 2012 was signed and added a sense of “certainty” to the previously uncertain structure.  

With certainty, came opportunity. While many individuals made substantial gifts in 2011 and 2012 fearing a reduction in the estate tax and gift tax exemption, others for a variety of reasons refrained from taking any action. This article discusses present and future planning opportunities that exist regardless of whether one previously took advantage of the increased gift tax exemption. Below are some basic, but highly effective techniques that serve to reduce future potential estate tax.

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