Your financial legacy is a reward for a lifetime of hard work and financial success. Many Americans want to give their children money, but aren’t sure about whether to make a living gift or leave money in their estate. This leads to the question: Should I give my assets to my children, now or later?
Should you gift your assets now or wait to give it all away only after you’ve died? In an increasingly complicated world, even a generous gesture can be fraught with problems for everyone involved. Forbes recently tackled this difficult issue a short while ago in an article titled “Should I Gift Money To My Children Now Or Later?” The only point they seemed to have overlooked is the possibility of a financial penalty many of us could face if we gifted so much that we have nothing left to pay for our long term care; an important issue I have covered in past blogs and will undoubtedly address in future ones as well.
The original article is a sort of evolving discussion between two advisers who end up giving solid points to support either option. That’s fair. There really are two ways to approach this dilemma because there are different motivations in either direction. Giving now can be an entirely different act – emotionally, financially, and legally – from giving at death. It raises issue of control (how much and when), issues of need (who needs it most now and later?), trust (can they be trusted to act wisely?) and, yes, mortality (do you wish to be there to see them enjoy and make good use of your generosity?).
For many it will be an important transition if they choose to gift in life, emotionally or financially, and it will likely be a gift worth making wisely and to the greatest advantage of all. Competent counsel can help think with you, identify the legal or financial consequences of either option, and help you structure the best transition for you and your family.
You can learn more about this topic as well as other strategies on our website under the tab entitled: elder law planning in Virginia. Be sure you also sign up for our complimentary e-newsletter so that you may be informed of all the latest issues that could affect you, your loved ones and your estate planning.
Reference: Forbes (April 23, 2014) “Should I Gift Money To My Children Now Or Later?”