This much I know:
"Without question the easiest method of transferring assets is to gift them to your heirs prior to death. Gifting is frequently used without the motivation of its estate planning merits, but simply to assist children and family members with activities such as a home purchase or business financing.
Gifting of assets can have potential tax benefits if the asset is given to a registered charity or if the asset was income-producing, resulting in less taxable income. Be careful when gifting income-producing assets such as stocks or bonds. Your altruistic act may trigger an unexpected tax liability for you. Generally, gifting an asset to an individual (other than a spouse) is treated as a sale (at fair market value) thus triggering any unrecognized capital gain on the asset. Also, the income attribution rules will be applied if the gift is to your spouse or a minor child. Under this rule, the income earned on gifts to either of these persons will still be taxable in your hands (except for capital gains received by a minor child).
Another drawback to gifting is that you relinquish all control over the asset, which may not be an acceptable outcome. Finally, while gifting assets represents a simple method of transferring the estate as well as reducing probate taxes, like most things, it should be done in moderation. Before a gift is made you should ensure that by making the gift you do not jeopardize your own lifestyle. This is best evaluated within a comprehensive financial plan.
It is also possible to gift assets on your deathbed by using an enduring power of attorney or mandate."