Tip of the Week

Are “Best if Used by” Dates Better Suited for the Grocery Aisle than Tax Legislation?

A phenomenon with which planners and clients must contend has been the enactment of laws that are designed to change, expire, or self-destruct due merely to the passage of time. Most notably this has occurred with gift and estate tax exemption levels. 

As tax laws change, creative minds find ways to address client needs to make taxes as minimal an impediment to achieving goals as is rightfully possible. Some opportunities with limited life spans, such as gifting assets to use large exemptions that are set to expire, necessitate a determination of whether they are truly “best if used by.” Actually pulling the trigger and taking advantage of such approaches requires understanding the rules, understanding the client, and analyzing (and being able to convey) the upsides and downsides from every angle, not just tax economics – is critical to an advisor’s successful practice and successful client outcomes.

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