A guide to helping clients make informed choices for gifts and bequests in their estates

It is common knowledge that estate planning can be a complex and daunting process, especially when it comes to taxes. However, what many do not realize is that estate planning is not just for the wealthy. Every taxpayer has the option to gift assets during their lifetime or through inheritance after death, and choosing the right option can provide a significant tax planning opportunity.

Below, you’ll find a few of the top questions from a recent webinar on the topic and their accompanying answers. If you choose to attend the on-demand version of this webinar, you’ll have access to the full recording and the entire list of Q&As.   

Q: Must the amount paid for tuition be for a current student or a future student to the school?
A: If it is paid to the educational institution, it can be for any student.

Q: Where might you input contents of a home (as a gift from an estate) on the Form 706, United States Estate (and Generation-Skipping Transfer) Tax Return?
A: On Schedule F, list all items that must be included in the gross estate that are not reported on any other schedule, including household goods and personal effects such as clothing.

Q: What is a “transfer for less than full and adequate consideration”?
A: It means a transfer for less than fair market value (FMV).

Q: A taxpayer receives life insurance proceeds and gives $7,000 to each of her three daughters. Should she have filed a gift tax return?
A: No, each separate gift is under $17,000.

To learn more about the tax implications of guiding clients with estates in choosing gifts or bequests, you can watch our on-demand webinar. NATP members can attend for free, depending on membership level! If you’re not an NATP member and want to learn more, join our completely free 30-day trial at natptax.com/explore.