Problems gifting by ProQuest


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									                                                                                                                                                         SPOTlIGHT: ESTATE PlAnnInG
GIFT Not everyone benefits from gifting business interests                                                                                         instead, nappi said, clients with smaller        promissory note that indicates that the child
                                                                                                                                              estates should sell, rather than give, a busi-        owes the parent the amount that the business
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                                                                                                                                                                                                    interest is worth at today’s discounted value.
                                                                                                                                                                                                    the hope is that the business “can generate
a gift tax,” he said. “We’re probably doing it                               scenario, the owner would not benefit from                          Clients with smaller estates                       enough revenue to pay back the parents, and it
very rarely — only on very large estates where                               making a gift and paying a gift tax. But while                     should sell, rather than give, a                    basically didn’t cost the children any money,”
we know that we’re probably going to have                                    the amount of the estate tax exemption —                            business interest to a child.                      he said. and if the parent sells the interest to a
some estate tax.”                                                            $3.5 million per person last year — remains                                                                            defective grantor trust, he or she will not owe
                                                                                                                                                  Ted Nappi, director, Withum, Smith & Brown P.C.
     With smaller estates of less than $20 mil-                              uncertain, nappi doubted the exemption                                                                                 any taxes on the sale, because for tax purposes,
lion, a business owner’s estate would not be                                 would be high enough that a person with a                                                                              the trust is still considered the business owner,
subject to a tax if the estate tax exemption is                              large estate would not be subject to an estate                   ness interest to the child. With a sale, the          he added. u
greater than the value of the estate; in such a                              tax at death.                                                    parent receives an installment or other type of                                E-mail to
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   Problems gifting
   Some PeoPLe may be hesitant
   about making gifts, said Stuart Glad-

                                                                                          THE RIGHT
   stone, of Brach Eichler.
         “it’s hard to get people to write
   out a check for gift tax,” he said.
   “People don’t like writing checks to
   the government if they don’t have to.”
         Another concern that 
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