There's very little good news in today's economic situation. The market value of homes, stocks, and just about everything else has declined. The one silver lining may be that now is a great time to make gifts to your heirs. At today's depressed values, you can give more without paying gift tax than you could when values were higher. Giving stock, real estate, even an interest in the family business, can move these assets out of your estate. Gifting is also a way to shift income and future appreciation to your
heirs.

Consider also taking advantage of the 2009 increase in the amount you can give annually to another individual. The 2008 limit of $12,000 increased to $13,000 for 2009. These annual gifts are not taxable, nor do they reduce your total estate tax exemption as larger gifts do.
 
Capitalizing on the decline in asset values by gifting is only one planning strategy you should consider if your estate is large enough to be subject to taxes. Remember that the estate tax, with its current exemption of $3.5 million and top tax rate of 45%, is scheduled to disappear in 2010, only to reappear in 2011 at higher rates and a lower exemption amount.

Clearly estate planning still makes tax sense. Contact us at (617)678-4021 for more information and guidance in this area.

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