Leaving behind, gifting, or transferring sizeable assets to family members through your estate plan could leave them subject to significant taxes. However, there could be major discounts associated with transferring real estate investments of equal value. For real estate investments in which the investor gives less than 50% of the asset, lack of voting rights or control can be considered when determining the value for estate planning and tax purposes. This can lead to discounts on the overall value and therefore, lower taxes. It is crucial to talk with an accounting professional before you pass on gifts directly to your loved ones.
The accounting professional should also be familiar with estate law but you will also need to loop in your estate planning attorney to assist you to determine the best way to set aside assets for your loved ones and maximize that value while also minimizing the consequences.
Even if a person owns 100% of a property, they could be entitled to a discount if they gave less than a 50% interest to any one individual. Since this could be an opportunity for estate planning purposes, it is one you should think over carefully and only after consulting directly with a lawyer who can tell you more about how this will influence your own estate as well as the taxes for the person who receives it. Planning these things now during the course of your life gives you more opportunity to use strategies and tools that are aligned with maximizing the value for your intended beneficiaries and minimizing the potentially negative consequences for yourself. The right lawyer is an important asset during this time so that you choose a plan that works for you.