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    Gifts under Powers of Attorney

    WealthManagement.com
    Aug 19, 2015

    Martin M. Shenkman 

    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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