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Warner Norcross + Judd LLP is a corporate law firm with over 230 attorneys serving clients in nine offices throughout Michigan. Among the largest law firms in Michigan, Warner works in virtually all areas of business law.

Michigan Law Firm - Warner Norcross + Judd LLP

Gold has always symbolized wealth, security and permanence — qualities making it an attractive asset for high-net-worth families seeking to preserve and transfer wealth across generations. But when it comes to gifting or liquidating physical gold, there are unique tax and logistical considerations that can significantly impact your family’s long-term planning.

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Here are several strategies to help ensure your gold holdings support a lasting legacy while minimizing unnecessary tax exposure.

Under current IRS rules, individuals can gift up to $19,000 per recipient in 2025 without triggering gift tax. Because gold is treated as “property” for tax purposes, you can use this exclusion to transfer gold bars, coins or jewelry to family members each year.

Determine the fair market value of the gold on the date of the gift (using the spot price for bullion or a professional appraisal for jewelry).

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Document the gift in writing — a brief letter noting the date, description and value is sufficient.

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Keep in mind: the recipient inherits your&nbsp;original cost basis&nbsp;in the gold. If they later sell it, they could owe capital gains tax of up to 20% (for jewelry) or 28% (for bullion and coins).&nbsp;<a href="https://communication.wnj.com/20/2169/compose-email/legacy-matters-blog---turning-gold-into-legacy--tax-savvy-ways-to-gift-and-manage-precious-metals.asp#_ftn1">[1]</a>

A Grantor Retained Annuity Trust (GRAT) can be an effective way to transfer appreciating assets, such as gold, to heirs at little or no gift tax cost. Here’s how it works: you contribute gold to the trust, receive annual payments back for a set term and any appreciation beyond a set IRS rate passes to your beneficiaries tax-free.

Gold’s historic tendency to appreciate makes it a strong candidate for GRAT funding, provided the gold can be accurately valued and properly titled in the name of the trust. However, keep in mind that if a GRAT holds&nbsp;only&nbsp;gold, it will be required to sell some of the metal each year to fund payments, potentially triggering capital gains — a detail to plan carefully around.

Another important practical step is ensuring the custody and documentation of the gold are handled correctly. The gold should be stored in an account titled in the name of the GRAT (often at a bank or custodian that offers secure storage), and the grantor should execute a formal assignment noting details such as the gold’s weight, serial numbers and value. Updating insurance and inventory records to reflect the GRAT’s ownership helps maintain clear records and avoid future disputes or IRS scrutiny.

Instead of creating and funding a GRAT, you might sell gold to an existing trust, allowing the trust to diversify its holdings while maintaining liquidity for future distributions. As with any sale, this could trigger capital gains unless the trust is a&nbsp;grantor trust&nbsp;of the seller, in which case the transaction is disregarded for tax purposes.

Before proceeding, however, it’s necessary to confirm the trust agreement permits tangible investments such as gold. As with a GRAT, the trustee must ensure the gold is properly titled in the trust’s name and the transfer is well documented to establish clear ownership and support future reporting.

For families who hold significant amounts of physical gold, forming a limited liability company&nbsp;(LLC) can be a smart and flexible way to manage and transfer ownership. Under Michigan law, an LLC may be created for virtually any lawful purpose, which includes investing in or holding physical assets such as gold.

If you already have an LLC in place, it’s worth reviewing the operating agreement to confirm it allows for investments in tangible property and doesn’t contain restrictions that would make gold ownership impractical. As with a trust, any gold owned by the LLC must be properly titled in the company’s name and clearly recorded in its books and insurance or inventory records.

From a tax perspective, contributing gold to a single-member, pass-through LLC you manage generally doesn’t trigger immediate tax liability. You can retain control of the company while gifting non-voting membership interests in the LLC to family members. Capital gains tax on the gold will not be incurred until the LLC itself sells the asset, at which point any gains (or losses) flow through to the members’ personal income tax returns.

An additional perk of this structure is that it allows for potential&nbsp;valuation discounts&nbsp;for lack of control or marketability when determining gift tax value of the LLC interests.

Liquidating Gold: Practical Considerations

When it’s time to sell, both online and local gold dealers are viable options. Online dealers can offer competitive pricing and convenience for smaller transactions, while reputable in-person dealers may be safer for large quantities or high-value items.

Obtain a fair appraisal or use the spot price to calculate value.

Verify the dealer’s credentials and transaction terms.

Insure shipments or meet in secure physical locations.

Gold can play a valuable role in your family’s estate and legacy planning — but it requires careful coordination among your tax, legal and investment advisors. By aligning ownership structure with long-term objectives, you can preserve the value of your gold and pass it on efficiently to future generations.

If you or your family office are considering how best to gift, hold or liquidate gold assets, contact Juliette Peterson, a member of our Private Client Family Office or your Warner attorney to discuss a strategy tailored to your goals.

<a href="https://communication.wnj.com/20/2169/compose-email/legacy-matters-blog---turning-gold-into-legacy--tax-savvy-ways-to-gift-and-manage-precious-metals.asp#_ftnref1">[1]</a>&nbsp;Note: These are the tax rates for long-term capital gains which apply if the recipient owns the gold for at least a year. Short-term capital gains on gold will be taxed at the individual’s ordinary income tax rate.

Legacy Matters

Private Client and Family Office

Associate

Juliette E. Peterson

Turning Gold into Legacy: Tax-Savvy Ways to Gift and Manage Precious Metals

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Turning Gold into Legacy: Tax-Savvy Ways to Gift and Manage Precious Metals

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