Taxpayers unnecessarily subject assets to estate taxation for many different reasons. Many suffer from a background that uses individual asset accumulation as a measure of success. A lifetime transfer would reduce their personal net worth. Once financial security of the individual and spouse, the most important estate planning consideration, is assured, then the focus should be on the asset preservation.
Most taxpayers provide that assets left at their demise go to their children.
Many also have charitable goals. Without proper planning, achievement of those objectives are compromised, particularly due to the imposition of estate taxes. However, the annual exclusions can be leveraged by gifting assets from one taxpayer to another. Because the savings to the taxpayer are so dramatic, the IRS has made it a priority to find a basis for limiting valuation discounts. To date, the IRS has only been successful in instances of poor planning.