Financial advisers met in Florida recently for a conference on estate planning sponsored by the University of Miami School of Law. One of the popular subjects was the ever-changing laws concerning lifetime gifts. For those who are considering making estate planning decisions, consulting with a financial adviser or attorney who has a good grasp on current laws is essential. Many tax provisions concerning gifts and inheritance are subject to the whims of Congress, which means the laws can frequently change.

As the system is now, the gift limit before taxes are incurred is $5.12 million. That doubles to $10.24 million with a marriage. The gift tax can be up to 35 percent, and gifts are seen as more advantageous than passing assets after death. Gifts leave less in the estate to be taxed by the government and any increase in value of gifts is not taxed as part of the estate.

In addition, up to $13,000 can be given away in gifts each year without being counted as part of the $5.12 million limit.

Unless Congress extends the tax laws by the end of the year, the $5.12 million could go down to $1 million next year. The tax rate would also increase to 55 percent.

At the end of 2009, lawyers were facing the same situation. Clients were encouraged to make large gifts due to the uncertainty of the next year. When the amount jumped up to $5.12 million, but the tax rate stayed the same, many clients regretted their large gifts. The lawyers tried to come up with ways to undo gifts, but none were all that success.

Such problems are only important to the extremely wealthy and, as one speaker at the convention said, most people can't afford to give $5 million gifts to family members. But for those who can, consultation with an experienced professional is essential .

Source: Forbes, "Tax Pros Tweak Advice About Big Gifts To Family," Deborah L. Jacobs, Jan. 10, 2012