Increasingly, we’ve been asked to help them find ways to assist their kids now, rather than waiting to leave them money and assets in their wills. The parents in their 50s and 60s want to be here to watch and enjoy seeing the ways their children will benefit from their generosity. If you find yourself thinking along these lines, you are not alone.
Much of estate planning means planning for where and to whom assets are to go after you are gone. On the other hand, some people want to see their plans take effect and their loved ones enjoy their generosity. So how do you begin moving the estate within your own lifetime?
A recent article in Forbes titled “Best Ways To Give Your Heirs Money While You’re Alive,” explored this subject.
The short answer is “giving” while you are living. However, there are certain limitations to giving, largely because of a screen of taxation. You want to duck under the gift tax itself, most likely, which means giving less than the annual exclusion (i.e., currently $14,000 per child). In addition, you may want to consider leveraging your lifetime gift/estate tax exemption to its greatest effect.
To make already complicated matters a bit more complicated, don’t forget there also are taxes based on to whom you are giving. For example, there is the generation-skipping transfer tax and, with certain assets, the kiddie tax.
To be sure, lifetime wealth transfers can be a great benefit to those on either end – the givers and the receivers. Seek qualified professional counsel in advance to ensure that all is done according to Hoyle.