Problem: You expect to live only a short time, but want to give $10,000 each to heirs to save estate tax. Your only asset is stock.

        Strategy: Sell the stock and make cash gifts — or give shares of the stock.

        Francis J. Niehaus, lawyer and certified financial planner, says federal estate taxes will take away at least 37 percent of any assets in excess of $675,000. Making $10,000 gifts can lower your taxable estate to that threshold.

        Be certain to have a durable power of attorney with a gift provision so gifts can be made if you should become incompetent. Then, assess the gain or loss that would be taken if stock were sold.

        Any stocks that lost value since they were acquired can be sold to harvest capital losses that would be eliminated at your death. Be sure to take gains equal to those losses. Take gains in the following order: first, on very small positions; next, on stocks with the least gain; and then, on stocks that dominate a portfolio, to diversify.

        Example: Assume a $1 million estate, from which 20 gifts are made of $10,000 each. Immediately, $74,000 in federal estate tax is saved. To make the gifts, $100,000 of stock was sold at a loss of $30,000. Another $100,000 of stock was sold at a gain of $30,000. No capital gains tax will be owed.

        Once losses are offset, different issues emerge: future heirs' tax brackets and their intentions for the stock. If the recipient will be in a lower tax bracket than the person giving, and wants to keep the shares for the long-term, it may be best to give shares instead of selling and giving the proceeds.

        Otherwise, sell and pay tax on the gain. Reducing a taxable estate by paying income tax reduces the estate tax that will be due.

        Readers: Consider Savvy strategies as general information only, and seek the help of professionals because circumstances might vary.

        Planners: Share your unique strategies with Enquirer readers. Send your Savvy strategies to Amy Higgins, 312 Elm St., Cincinnati, OH 45202, or e-mail ahiggins@enquirer.com.

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