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Can Annual Gifts Be Made Retroactively?

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Been working with a New Madrid family that has worked hard over the last several decades and have accumulated an estate that is likely to cause there to be federal estate tax when they die. They were anxious to determine what needed to be done to reduce the ultimate federal estate tax burden.

We had a fairly in depth discussion about the pros and cons of annual gifting to their descendants – and perhaps even the spouses of their descendants. In particular, they wanted to know if they could back-date transfers so that it would appear that the transfers were made last year – enabling them to reduce the value of their estate even further.

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I hated to burst their bubble, but I had to be the bearer of bad news. They could not, this year, do transactions that would appear to have been made last year or the year before. They thought, just maybe, that if the check was dated last year, that would be OK even though the check was deposited by the donee until this year.

That’s why it is so important that you get the education you need so that you can take advantage of tax reduction and other estate protection techniques that can be taken advantage of if you act early in the process.

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