I think the case for urgency is fairly self-evident. Given how difficult and involved estate planning can be, people, for whom this is relevant, should be gearing for action now, if they have not already done something.
When it comes to 2013 taxation, the future may be catastrophic for estate tax planning. As each day of 2012 passes us by, incredible wealth transfer opportunities are dwindling away. Can you beat the clock before time runs out?
These last few months are either a time to seize the unprecedented gifting opportunity of a $5.12 million gift tax exemption, or a time to run out the clock on this opportunity perhaps for the rest of your lifetime. The gift tax exemption is scheduled to return to $1 million.
If you are looking to seize the opportunity in 2012, then you will find encouragement in a recent Forbes article titled “Romney Wants No Estate Tax - Case For 2012 Mega Gift Remains Compelling.” In short, the article notes that there are ways to give now without spoiling future opportunities, if you think carefully about the right kinds of assets to give. The author of the article calls such strategic assets “legacy assets,” and offers this quote from an attorney comrade:
Legacy assets are ideal for the “megagift” for several reasons:
- Art, real estate, family business interest and other Legacy Assets are secular investments, that is held for more than 10 years, and so the gifting of an asset does not substantially reduce the lifestyle or disposable financial wealth of the client,
- The financial value of Legacy Assets is not correlated to the investment market,
- The personal and social value of legacy assets is both real and significant,
- Since there is both a financial and a social value to the ownership of legacy assets, they work well with charitable split interest trusts that can significantly leverage the Unified Credit, and
- There are techniques that can be used with legacy assets that cannot be used for investment assets.
In terms of a Mega Gift, legacy assets are definitely worth considering. Remember, the time is now to act on these amazing wealth transfer opportunities. Don’t wait until it’s too late and the ball is already dropping in Time’s Square.
Reference: Forbes (October 14, 2012) “Romney Wants No Estate Tax - Case For 2012 Mega Gift Remains Compelling”