Negotiating, Drafting, and Enforcing Gift Agreements: Restrictions and Pitfalls to Avoid, Tax Considerations

The necessary details of gift agreements are often overlooked by the parties, potentially resulting in serious legal and tax ramifications and litigation. Incorporating charitable giving in an estate plan involves careful consideration of specific rights, conditions, restrictions, and other vital provisions within a gift agreement to ensure the donor's intent and the benefits allowed for estate planning purposes.

Gift agreements must outline the donor's intentions for the use of the contribution, any conditions precedent, clauses regarding changes in circumstances, and other items that could lead to litigation or reversion. Also, careful planning must ensure that any limitations do not endanger the deductibility of the contribution by the donor.

Estate planning attorneys must know the critical elements of effective gift agreements and ensure that donors maintain the tax benefits of such transactions. In addition, enforcing gift agreements that lack key provisions and necessary protections can be a complex and frustrating path for counsel and donors.

Listen as David J. Spacht, Attorney at Cahill Gordon & Reindel, discusses recent developments impacting charitable giving in estate planning, outlines the pitfalls of ineffective gift agreements, and offers techniques for negotiating and drafting gift agreements to avoid litigation.