Few Clients Are Using this Year’s $5.12 Million Gift Exemption. Why?

It is puzzling why fewer clients than expected are using this year’s unprecedented, and generous, $5.12 million federal gift tax exemption.  This exemption ends beginning in 2013.

It may be that clients cannot decide what property to use for making the gift for the remainder of 2012.  If this is the case, below is a way potentially to make the $5.12 million gift during 2012 and wait until after 2012 to select the property for funding the gift.

This technique centers on clients using an enforceable promise as the basis of the gift so as to preserve the advantage of the $5.12 million exemption this year.

This post is a purposeful repeat of my earlier commentary about this gift planning using an enforceable promise.  See my blog post below captioned Part II — Time is Running Out (gifting for the rest of 2012).

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