Appraisal Clients

Kimball is booked through December for new clients and must defer some appraisals until 2013. A specialist in valuing privately held companies and intellectual property, he is fielding requests in the coming weeks for values of companies in the real estate and timber industries as well as a best-selling author’s literary property, he said.

“There are a lot of nervous wealthy people out there,” Kimball said.

When an appraisal cannot be completed before year-end, one strategy involves funding a trust with cash or securities this year and swapping out the cash for an equivalent value of another asset after it’s appraised.

Kalb is advising some clients who are interested in estate planning and still need an income stream from gifted assets on how to establish spousal lifetime asset trusts, or SLATs.

“They want to make use of getting rid of $5 million in assets but they are in an economic position where they may need the cash flow from those assets,” Kalb said.

Cash Flow

One spouse’s $5.12 million exemption is transferred into a trust that names the other as a discretionary beneficiary, along with heirs. The trust can be funded by assets that generate income, such as stock in a closely held business with cash from dividends used for distributions, he said.

Spouses who choose to set up separate trusts naming each other as beneficiaries risk rejection by the U.S. Internal Revenue Service if they’re created with too nearly identical terms, said James R. Ledley, a partner at Kleinberg, Kaplan, Wolff & Cohen PC in New York.

The “two trusts must not be reciprocal,” he said.