It has been a busier than usual first half of December for our CPA friend Lars, with a number of clients deciding late in the year to take advantage of the $5 million gift tax exemption that might be reduced in 2013. It's the 16th, and he's out taking one of his early Sunday walks along the gravelly beach. He and Kyra came out Saturday evening for a one-night stand, they like to call these short visits. Drizzle this morning but he doesn't notice it; he's preoccupied with broad thoughts about his work. He loves to get his perspective back at the beach.
Yes, a number of clients making large gifts, but not even most of them who could. And among those who are giving big, few are going to the max. Of course the max is $10 million for a couple, and while Lars has more than his share of very successful clients, $10 million is still a lot in his medium-sized city. He had wondered earlier in the year why few were taking advantage. Now with the deadline looming and the Democrats keeping the White House, more were motivated but not the majority.
Lars thinks along as the rocks crunch under his steps and the tide laps toward him. Discussions in Congress; who knows? Last time, two years ago, they waited 'til the end of the year to come up with a solution for that year! What a whimsical process! What would I do if I had say $8-10 million at my age? (Lars is worth about half that much.) I'd be cautious too. The harsh investment setbacks of 2001 and 2008 have left us all less confident. And people are living longer -- Kyra's likely to go into her 90s. This isn't the end of estate planning; there will be another day, even if the gift tax exemption does go to $1 million in January.
This soothing perspective isn't an excuse for doing nothing, Lars reminds himself, but it is a reason to be deliberate and wise. Satisfied, he turns around and heads back for coffee.