Are There Any Regulations on Gifts That Are Accepted by Family Members?

Are there any regulations on gifts that are accepted by family members? Should we not accept restricted gifts, for instance?

You have to be careful about closely held business interests because of the restrictions on self- dealing and who you can sell them back to. There are no laws that explicitly prohibit certain gifts. Restrictions, if they’re for a particular purpose, can be imposed at the time of the gift. Restrictions on the liquidity and sale of an asset, such as closely held stock, will affect the value of the stock, its liquidity. If you’re unable to sell stock, but you have to meet the 5% payout, where’s the money to come from? If the only eligible purchasers if the foundation wanted to sell the stock are disqualified persons, you’re going to have a problem selling the stock.

There are considerations, but there’s no specific law that prohibits the foundation from accepting a gift. You just want to be very thoughtful about what will happen, once you own it, how will you dispose it, how does it fight in your portfolio, what are the valuation issues, et cetera?