[WSBAPT] large gifts of appreciated stock to charities in estate planning

[Philip N. Jones]

The lifetime charitable gifts are no longer part of her estate once they are made, so her estate need not worry about deducting them on an estate tax return.  But she should be deducting them on her federal income tax return.
The same is true of gifts to individuals, except they are not deductible on her income tax returns.
Whether these gifts were or were not reported on gift tax returns does not change these answers.
These answers are the same in both Washington and Oregon.
Phil Jones


Philip N. Jones
Duffy Kekel LLP
Portland, OR
pjones at duffykekel.com
(503) 226-1371

On May 15, 2020, at 2:04 PM, Susan Donahue <sdonahue at sdonahuelaw.com> wrote:


Hello everyone,

I have a client who gives large gifts of appreciated stock to charities each year.  I’m not certain the effect these gifts will have on her gross estate/taxable estate at her death.  Are they treated the same as $15,000 gifts to individual persons which, if the proper gift tax form is filed each year, can be deducted from the gross estate at death?  I’m trying to figure out the best estate plan for her, but I’m not familiar with the effect of gifting appreciated stock to charities annually, as she does.  Any thoughts would be appreciated.

Her estate is over the $2.193 million exclusion amount, but I’m not sure by how much.  I am just beginning to work on this.  If it is not too much over, she can have her estate just pay the 10%estate tax on the amount over $2.193 million if her estate is worth less than $3.193 million, but the tax could be a lot more than the expense of creating an irrevocable trust.  I think the purpose for her to have a trust would be to shelter her estate from taxes.  But how do the annual charitable gifts factor into this?  I’m thinking an irrevocable trust of a certain amount of her present estate would keep her taxable estate at her death under the exclusion amount.

Any thoughts?  All are appreciated.

Susan

Susan Donahue
Law Office of Susan Donahue
125 West 2nd Avenue, Suite “B”
P.O. Box 81
Twisp, WA 98856
(509) 996-5944 (phone)
(509) 362-9692 (fax)
sdonahue at sdonahuelaw.com<mailto:sdonahue at sdonahuelaw.com>
www.sdonahuelaw.com<http://www.sdonahuelaw.com>

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