Gift Now, Save Big

While many people are focused on ensuring that they do not outlive their assets, when it comes to retirement planning, there is a risk that people can leave too much money when they die.  This is a problem that can result in their children and grandchildren paying a premium in estate taxes.  One of the best solutions is to gift the assets away. 

The question then arises, how can you be sure your client has enough money to give away while they are still alive?

Running conservative retirement projections allowing clients to frame their spending within a range can help them feel better about never running out.  It is also important to address your client’s fear of market crash by setting aside five years of their cash needs in liquid accounts such as short-term CDs and bonds, so that whatever happens they will be fine.  It is ultimately the practitioner who must try to get the client to recognize that in addition to tax benefits, there are emotional benefits that come with making gifts while they are still alive.

See Howard Hook, Should You Gift Some Assets to Heirs Now? The Wall Street Journal, Sept. 21, 2014. 

Special thanks to Jim Hillhouse (Professional Legal Marketing (PLM, Inc.)) for bringing this article to my attention.