Model gifts & non-taxable transfers (incl. IDGTs, SLATs)

How to model a transfer

1. In the Hypothetical Waterfall, click the Hypothetical Transfers button in the right hand corner.

2. Select Create Hypothetical Transfer.

3. Select Gift/transfer.

4. Choose the source of the funds from the From dropdown menu.

   1. For Business Entities directly owned by an Individual, you can select the owning Individual, and an option will appear allowing you to select the desired Business Ownership.

5. Select the individual, organization, or entity to which you will transfer funds

   1. Existing Entities. You can choose from an entity you've already created or input a new one in the drop down.

      1. If you select Add New from either the From or To dropdown and choose Entity, you’ll create a new entity that will appear in non-hypothetical waterfalls.

   2. Draft Entities. In some cases you may want to model the hypothetical creation of an entity.

      1. To create an entity specifically for hypothetical purposes, toggle on Transfer to a New Draft Entity below the To dropdown menu.

      2. Draft entities can be reused across multiple waterfalls, so there’s no need to create a new draft entity if you’re modeling the same one for multiple hypothetical scenarios.

6. Optionally, name the transfer for clarity.

7. Enter the transfer details, including the amount, frequency, year, and any discounts.

8. To determine estate tax treatment, select the Type of Transfer from the dropdown menu:

   • For more information on tax treatments, click the question mark icon.

     

9. Click Create Transfer to finalize.

Valuation Discounts

You can discount a transfer for gift tax purposes, directly from the transfer module. To apply a discount, simply enter in the discount rate and we will show you the calculated gift value for tax purposes in the blue help text.

• Note that this can be used to simulate items such as gifting illiquid assets, such as LLC or LP interests.