Aug 19, 2015
It’s common to include in a durable power of attorney (POA) the right for an agent
(the person named to act on behalf of the principal who creates/grants the power) to
make gifts. Gift clauses raise a myriad of issues and should never be considered
“boilerplate” or standard. They should always be tailored to appropriately address
your client’s specific needs and goals. For many people, the new higher federal
estate tax exemption ($5.43 million in 2015, inflation adjusted and potentially
double for a married couple) might arguably make the default assumption for gifts
under a POA, an express prohibition from making gifts. Even if your client is subject
to estate tax in a state that remains decoupled from the federal estate tax system,
like New Jersey, the capital gains tax heirs might incur on selling an appreciated gift
might be greater than the state estate tax saved by having made the gift. So
deliberate thought on what your client’s POA should say concerning gifts is vital to
his financial security and accomplishing his planning goals.
Read his commentary here.
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