Problem: Estate taxes are slated for repeal in 2010, but you're concerned about not living to 2010. How can you shift more wealth to family and charity, without large gift and estate taxes?

        Strategy: Develop a lifetime gifting program transferring assets to family and charity. Michael D. Barnes, lawyer and vice president of Johnson Trust Co., says there are five primary ways to lower taxable estates:

        • Annual exclusion giving. Tax law allows tax-free gifts of $10,000 a year to anyone, so couples can give $20,000 a year.

        • Gifts for tuition and medical expenses. You can make unlimited gifts for tuition and medical expenses, as long as you directly pay the provider of services.

        • Unified credit giving. In 2001, everyone can shelter $675,000 from gift or estate taxes, with this amount rising to $1 million next year and $3.5 million by 2009. By giving this to kids now, you shift all future appreciation out of your estate.

        • Marital giving. You can make unlimited gifts to a spouse without tax. But these gifts defer taxation only if the recipient then dies with a taxable estate. Those with estates in excess of the unified credit amount ($675,000 in 2001) should try to equalize ownership of assets so each spouse fully uses their unified credit.

        • Charitable giving. Besides removing assets from your taxable estate, you receive income tax savings by gifting to charity — especially with appreciated stocks. And using charitable trusts can increase income and avoid capital gains taxes.

        Estate taxes may indeed vanish by 2010 — but recent tax law provides for their reinstatement in 2011, absent further actions in Congress. So continue a lifetime gifting program if you have a large estate or concerns about your own longevity.

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

        Planners: Share your unique tips 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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