How a Net Gift Trust Turns Appreciated Assets Into Tax-Free Gifts

Lucas and Luna explore the Net Gift Trust, an estate-planning strategy where the donee agrees to pay the gift tax in exchange for receiving highly appreciated assets. Using the example of a family-owned commercial real estate portfolio valued at $12 million with a cost basis of $3 million, they walk through how a net gift arrangement can reduce the donor's taxable estate by $9 million while the donee uses a loan against the property to cover the tax bill. They discuss the IRS's key ruling on net gifts, the importance of a qualified appraisal, and why this strategy works best when the donee has liquidity or access to credit. The episode also covers the risk of the donee defaulting on the tax payment and how a carefully drafted net gift agreement allocates liability. No prior episodes have covered this specific technique, making it a fresh addition to the show's trust-focused library. #NetGiftTrust #EstatePlanning #GiftTax #AppreciatedAssets #IRS #Trusts #TaxStrategy #WealthTransfer #FamilyBusiness #RealEstate #QualifiedAppraisal #GenerationSkipping #Liquidity #Finance #FexingoBusiness #BusinessPodcast #Episode58 #LucasAndLuna Keep every episode free: buymeacoffee.com/fexingo