Making gifts still matters, even after ATRA
Abstract: The American Taxpayer Relief Act of 2012 (ATRA) eliminated much of the uncertainty that plagued estate planning for years by making two key provisions “permanent”: the $5 million gift and estate tax exemption (adjusted annually for inflation) and exemption portability between spouses. But, while ATRA relieves some of the pressure on people to transfer wealth during their lives, lifetime gifting still provides some significant advantages. This article explains how gifting assets now can “freeze” their value and remove future appreciation from one’s estate. It also shows why, all things being equal, paying gift tax is “cheaper” than paying estate tax.