Plan Now, While There is Still Time!

David A. Berek (Credit Suisse Family Wealth Management) has recently published his article entitled Year-End Planning for Trust-and-Estate Clients, 95 Ill. B.J. 606 (2007).  Here are some of his recommendations:

• Clients should be encouraged to make annual exclusion gifts early in the year to maximize the potential for appreciation of the gifted property.
• Year’s end is also a good time to make a periodic review of your client’s overall financial situation to confirm that the estate plan in place compliments the client’s current net worth and is consistent with your client’s estate planning goals and objectives.
• Making charitable contributions at the end of the year will maximize your client’s use of funds during the year and still provide an income tax deduction for the tax year.
• The end of the year is also a good time to work with your client’s accountant to discuss minimizing capital gains and harvesting capital losses.
• You may also recommend that your client consider giving appreciated property to children or grandchildren if they are in a lower tax bracket than your client.  * * *  While the newly enacted modifications to the Kiddie Tax are effective in 2008 and will reach children under age 19 and students under age 24, the current law (until December 31 of this year) is limited to children under age 18. Thus, there is a planning window of opportunity for all 18 to 23 year olds to be taxed at their own rate in 2007.