This answer really depends on the asset(s) to be transferred and the accomplishment of your goals. Depending on your circumstances, there may be a way to retain a life estate in an asset while transferring the remaining interest and then still qualify the asset for a step-up in basis. This is done quite frequently with houses for Medicaid planning purposes. You should consult an estate planning attorney and complete any prospective transaction before year's end, as the Federal Estate Tax exemption is set to return to $1 million.
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In order to receive a step-up in basis upon your death, you will need to retain some form of control over the asset until instantaneously before your death. The most common is the retained life estate deed, which is very useful in Medicaid planning and allows you to reside in the property until your death. Other options might include setting up financial accounts as a joint account with both names on the account. Be aware, however, that with a joint account the other person will have full rights to withdraw funds from the account and also would expose the account to his/her creditors if something should happen.
Perhaps the best solution to accomplish your gifting goal, given the dollar level you have mentioned is to set up a Life Insurance Trust, either transfer a pre-existing policy to the trust for funding if one is available, or have the trust purchase the policy itself. If properly constructed, you could then gift the annual premiums for the policy each year within the 13K annual gift allowance to keep the policy in full force (this is called a Crummey power).
You should discuss your plans/goals with your estate planning attorney as there is a tradeoff between getting the basis step-up and the amount your are gifting away (for example, in the life estate deed mentioned about, when you retain a life estate, you are necessarily NOT giving away the full value of the property today because, by definition, you have retained a certain portion). There are different options available to you based upon your goals and the assets you have available to meet them and your liquidity.
As the other lawyers have pointed out, you really cannot GIFT the money and have it qualify for a step-up in basis. You need to retain an interest in the assets until the time of your death. If you try to game the system as you describe, you could be in for a very nasty surprise.
Under current law, as you stated, the exclusion amount for persons dying in 2012 is $5,120,000. If nothing changes, the amount drops to $1,000,000, as of January 1, 2013. If you gift $1.5 million this year, and the exclusion amount drops to $1,000,000, your estate would be liable for taxes on $500,000, upon your death. (This, of course, assumes that no changes are made in the estate tax laws. That may very well happen, but with a bunch of politicians focused on fall elections and not taxes, it would not be shocking if nothing is done by the end of the year.)
You are also mixing three different sets of tax laws. The estate and gift taxes are separate and distinct from income taxes. If you GIFT assets, a carryover basis applies to them. If you INHERIT assets, a step-up basis applies, for income tax purposes. Giving away anything more than the annual exclusion for gift taxes, ($13,000 for 2012) would result in the need to file a Federal Gift Tax Return, (Form 709) for that year.
For planning of this nature, it is very important that everything be done precisely and correctly. You need professional guidance from an attorney or CPA, in order to make sure that you get this right, and that it does not end up costing you or your beneficiaries far more than you intend.
Best of luck to you!
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Information provided on this site should not be used as a substitute for competent legal advice from a licensed attorney that practices in your state. The law changes frequently and varies from state to state. If I refer to your state's laws, you should not rely on what I say; I just did a quick Internet search and found something that looked relevant that I hoped you would find helpful. You should verify and confirm any information provided with an attorney licensed in your state.