Giving it away. Larger gifts, however, leave you vulnerable to the gift tax, assessed at the same rate as the estate tax. But gifts beyond the limits are first deducted from your overall estate-tax exemption. Yet this is a tricky area. In some situations, such as passing on a business or home, advisers say that paying gift tax now can avoid a bigger future estate-tax bite.
Life insurance is a trap in estate planning.
N.Y. You can avoid that outcome by placing the policy in a trust. A lawyer or tax adviser can help you through the setup rules. Many people plan for estate-tax deductions by making bequests to charity, but if the estate tax is killed or reduced, that may be less useful. Still, being charitable could pay off. When allocating bequests, consider leaving an IRA whose withdrawals are subject to income tax to the charity, and other assets to your heirs.