It's a sad fact but true, that due to the current economic crises, many of us have assets with present values lower than the price we paid. Not only is this frustrating, but often a frightening reality as we look to retire or perhaps use that equity for some other reason. Don't despair, within this new normal cloud; there may be a silver lining. Many of these devalued assets may qualify for a valuation discount. Now may be the time to transfer these assets to heirs, most especially if we look to the future and understand there will come a time when their value should eventually increase. If you gift these assets this could be an effective way to transfer to your family members a greater total amount of wealth while, at the same time lowering the amount of transfer taxes that must be paid.

Any assets that you have acquired such as stocks, bonds, real property, cash or anything else can be gifted to other individuals or organizations. Federal law allows you to annually gift, to as many individuals as you desire, up to $13,000 worth of assets without filing a gift tax return. For 2012 only, in addition to that amount you can give away property worth up to $5.12 million without paying any gift tax. It therefore, goes without saying that NOW is the time to act and take advantage of this tax incentive. New York, as have many states, eliminated that gift tax. It is the perfect time to save you and your family what could amount to a huge amount of money in taxes that do not need to be paid.

We do not know how long these beneficial gift tax rules will be in effect. Potentially come the end of 2012 we could face big increases. It is anticipated that as of January 1, 2013 this gift tax rate may increase from 35% to 55% if no new legislation is passed. Furthermore the current lifetime gift tax exemption of $5.12 million could dramatically decrease to only $1 million as of January 1, 2013. There is no way to know if Congress will extend these favorable rates.

If you are planning to gift a sum of money to someone in your family, you may want to consider forming a trust as soon as possible. Trusts are a fail safe way of limiting your heir's accessibility to funds prior to the time you direct and which is stated in your trusts' terms and conditions. This is not a quick or easy process. It should be a thoughtful endeavor that is planned, reviewed, discussed and thoroughly thought through. There are countless things that should be considered in every estate plan, and all trusts take time to plan, prepare, review and execute.

Now is the perfect time to think of your family, loved ones or perhaps even a favorite charity. Estate planning to take advantage of this gift tax opportunity can be an invaluable option if you wish to reduce your taxable estate. If you want information in reference to trusts, estate planning, assets or investments, AVZ is here not only to answer questions but to also to help you through this process and make it as simple, easy and painless as possible for you. We would be delighted to share our expertise to make sure your intentions are fully executed in accordance with your heart's desire. Do not hesitate to call us if you would like us to answer a question or discuss options more fully with you. The decisions you make today will impact you and your loved one's future for generations to come.