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Gifting money before you pass away

On Behalf of | Apr 1, 2020 | Estate Planning |

Estate planning does not always have to mean putting money in a trust or writing out your assets in a will to give them away after you die. You may want to gift money to your heirs before you pass away.

For one thing, this can help to reduce the tax burden on the estate, which may mean that more of the money stays in your family. You can also make the estate process simpler and easier by parring down the estate in advance.

Another advantage is that you get full control over the money. You can give it to whoever you want. While you can’t necessarily dictate how they use it, your heirs may be more prone to use it in ways you approve of than they would be after you pass away. Regardless of use, there is no question about what you want to give to a specific person because you get to make that decision in real time.

Similarly, gifting money in advance may help to reduce the odds of an estate dispute. If your heirs are unhappy, they can talk to you about it, rather than fighting with other heirs over what you “may have wanted” or “must have meant” in the will. They can just ask you to clarify, you can explain and confirm your decisions, and they can take anything up with you, rather than with each other.

Now, you’re probably not going to gift everything you own before passing away, so this is only one part of estate planning you need to consider, but it helps to show how many options you have.