Continued Uncertainty About Estate Tax Law

Daniel Grant writing for the Huffington Post has a good article about the impact of the current uncertainty about the unresolved status of the Estate Tax laws.  As many appraisers know, currently there is no estate tax for 2010 and the laws revert back to some high levels in 2011 if nothing is done. Grant states that many donors are not sure how to plan their gifts to institutions, If the rate stays low then some believe there will be less reasons or incentive to give, although many believe donors give because of a desire to do so and not for tax reasons.  But the loss of a tax incentive leaves one less avenue non profits can use to convince patrons to give.

Future decisions on estate taxes, either reductions or increases will impact charitable institutions, those wishing to donate, and of course appraisers.

Grant states

With no current inheritance tax and the possibility that the exemption may drop to $1 million or rise to $5 million or be done away with completely, it makes the type of planning that wealthy art collectors do much more complicated. "People need to feel comfortable in a culture of giving," said Louis Grachos, director of the Albright Knox Art Gallery in Buffalo, New York, "and they don't feel comfortable right now. I have heard from prospective donors who've said, 'I don't know what I should do.' It's one more hurdle for museum directors."

He noted that the lack of clarity about the inheritance tax "takes away a positive incentive for giving," and that his pitch to donors at present is that they should include the museum in their bequests "even if there is no financial benefit." One of those donors, 75 year-old retired former Albright Knox board chairman Charles Balbach ("I'm in good health, thank God"), acknowledged that "there is no advantage to giving anything this year, because it costs you 100 cents on the dollar." However, he made out his will five years ago, providing a bequest to the museum and has no plans to change those provisions regardless of what Congress does or does not do. "I can't speak for other people, though."

To read the full post, click HERE.