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

[Susan Donahue]

Hello Phillip,

 

Ok.  That makes sense.   Thank you.  We have to explore what she wants to do with her estate.  I was at first concerned about protecting it from estate taxes, but if she says in her will that she gives a certain percentage to certain charities at an amount that will bring her overall taxable estate below the Washington State excludable amount that might work.  

 

Susan 

 

From: wsbapt-bounces at lists.wsbarppt.com <wsbapt-bounces at lists.wsbarppt.com> On Behalf Of Philip N. Jones
Sent: Friday, May 15, 2020 2:54 PM
To: WSBA Probate & Trust Listserv <wsbapt at lists.wsbarppt.com>
Subject: Re: [WSBAPT] large gifts of appreciated stock to charities in estate planning

 

To answer your second question, an irrevocable trust would probably not help.  If she wants to give money to charity during life, then just give it, with no trust.  If she wants to retain an interest in such a trust, then use a charitable remainder trust or similar vehicle.  But if she uses a regular trust and retains an income interest, then the trust will be brought back into her estate, and it would be simpler to just put some charitable bequests in her will.  Those bequests will be 100% deductible on her estate tax return. 

Phil Jones

Philip N. Jones 

Duffy Kekel LLP

Portland, OR

pjones at duffykekel.com <mailto:pjones at duffykekel.com> 

(503) 226-1371





On May 15, 2020, at 2:46 PM, Philip N. Jones <pjones at duffykekel.com <mailto:pjones at duffykekel.com> > wrote:

 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 <mailto:pjones at duffykekel.com> 

(503) 226-1371





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