San Jose, CA asked in Estate Planning and Tax Law for California

Q: Can I gift shares to my daughter for estate planning?

I just started a company (a Delaware C-corp). It is worth basically nothing at this point since it just got started. There are no investors so far, so I own most of the shares in the form of restricted stock that has been early-exercised. The shares will be vested over 4 years.

I have a daughter who's a minor. In case the shares will appreciate in value, I want to gift her some of the shares now when the value is low. How can I go about doing that?

Thank you.

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1 Lawyer Answer
Jeffrey Louis Gaffney
Jeffrey Louis Gaffney
  • Estate Planning Lawyer
  • Carlsbad, CA
  • Licensed in California

A: One solution I have seen is to issue her non-voting shares. These will have 40% less value than a regular voting share because they have no control. That would allow you to give them to her at $25,000 per year without filing a gift tax return.

Nina Whitehurst agrees with this answer

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