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Financial Planning Competency Handbook, 2nd Edition by CFP Board

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CHAPTER 62 Gifting Strategies

Elissa Buie, MBA, CFP®

Golden Gate University

CONNECTIONS DIAGRAM

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Gifting strategies require the strategic use of time value of money calculations. Many gifting strategies incorporate the use of insurance. The choice of assets, including investments, to be used in gifting strategies is crucial to maximizing a client’s potential lifetime benefit and goals of gifting. A financial planner must understand the income tax implications of any gifting strategy to be considered. The Unified Gift and Estate Tax laws require that all gifting strategies be coordinated with the ultimate estate tax ramifications. Gifting strategies are very complex, requiring excellent communication skills on the part of the financial planner. Also, any gifting strategy analysis requires working alongside other professionals, especially estate planning attorneys but also often including tax preparers and insurance agents. Good interpersonal communication will facilitate the work of the group of advisers for the benefit of the client. And finally, as with every aspect of financial planning, the planner must adhere to standards of professional conduct and fiduciary responsibility.

INTRODUCTION

The United States has a Unified Gift and Estate Tax system. The United States began to develop today’s Gift and Estate Tax system in 1916, just before joining World War I. Prior to this ...

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