Should I gift appreciated assets or cash to my heirs?

For heirs, it usually depends on timing. If you gift appreciated assets while you're alive, the recipient takes your original cost basis (carryover basis) and will owe capital gains tax on all the growth when they sell. If instead they inherit those same assets at your death, the basis steps up to market value and that built-in gain disappears – often a far better outcome. So as a rule, hold your most appreciated assets until death and gift cash or higher-basis assets during life. The exception is for very large estates facing estate tax: there, gifting appreciated assets early can make sense to remove future growth from the estate, accepting the lost step-up in exchange for estate-tax savings. For most families nowhere near the exemption, let appreciated assets pass at death and keep the step-up. See wealthserene.com/goals/leave-a-legacy.