There are three steps involved in making a lifetime gift: the first is that the donor intends to give the gift, the second is that the gift is delivered to the donee, and the last step is that the donee has to accept the gift for it to be a valid transfer.
There are a couple different types of gifts including “outright gifts, gifts in trust, and gifts under the Uniform Transfers to Minors Act (UTMA).” Each type of gift differs in its outcome: the outright gift transfers all the rights of the property to the donee and the donor no longer has responsibility of the property, whereas the gift in trust still gives the donor some power as a result of the donor writing up the trust and determining when the transfer is going to occur whether it is transferred little by little or if it happens all at once. The UTMA gives the donor the ability to make a gift transfer to a minor without a trust, which in reality would be an outright gift to a minor. The gift usually benefits the donee more than the donor. There are taxes involved in a transfer of a gift of property including a gift tax and an estate tax that go together when it comes to the tax rate. Then there also is a generation-skipping transfer (gst) tax, which applies when a gift is given from a donor to a donee more than one generation away. The GST tax rate is currently 55%. How do you determine the value of a lifetime gift? The value of a gift and its subsequent applicable tax is determined at the time of the transfer and not afterwards. Usually expert appraisers can evaluate and give a recommendation on the value of a certain gift.