Monday, February 14, 2011

Prospecting for $5-Million Givers

As the Times reiterated yesterday, what makes the new revised federal gift tax so special is the perhaps temporary lifetime exemption of $5 million. Estate planners urge the wealthy to give big now.

Who's likely to heed that advice?

Good prospects probably share two characteristics:

They're relatively New Money. They can give away chunks of their rapidly expanding businesses (like this family-owned lumber company) without affecting their current income or standard of living.

They're Ultra High Net Worth. Even for someone with $30 million or more, putting aside $3-5 million for younger family members is a pretty big deal.

All told, new money and old, Wealth-X estimates the U.S. contains around 55,000 UHNWIs. Half of them have $30-50 million. Almost another third have $50-100 million.

But as Robert Frank pointed out on Wealth Report, the majority of those 55,000 live in just five states: California, New York, Texas, Florida and Illinois.

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