Tuesday, January 15, 2013
The last minute fiscal cliff bill came as a surprise to many who rushed to give last minute gifts to their relatives. After all, many estate planning attorneys and tax advisers believed that it was unlikely that Congress would come to an agreement before the deadline. Now, it appears that the last minute attempt to give gifts has left some clients with "gifting remorse." According to Reuters, "[s]ome wealthy clients have told their advisers they felt they had rushed into giving too much or too soon, decisions made under the then very real threat of leaving heirs with a heavy tax burden down the road."
As with all regret, there is a silver lining for these clients. These clients have done their estate planning, which they should have done in the first place, and there are several other perks that clients can feel good about. First, the money that they gifted to their relatives in probably in a better place, asset protection wise. Many gifts were probably placed into trusts, which is good because it will protect the money from potential creditors. If a person choose to gift stocks or other appreciable assets, the person might not have been able to give away as much if the stocks had appreciated.
See Jennifer Hoyt Cummings and Suzanne Barlyn, Your Practice: Consoling Clients Who Have 'Gifting Remorse', Reuters, Jan. 14, 2013.
Special thanks to Brian Cohan (Attorney at Law, Law Offices of Brian J. Cohan, P.C.) for bringing this article to my attention.