3 Things to Consider Before Gifting Assets to Your Family

Mike Gann Estate Planning

If you’re like many retirees, you’ve worked hard to build a career, accumulate assets and raise a family. You probably want to pass those assets on to your loved ones and leave a legacy for those you care about most. While it may not be enjoyable to think about your death, estate planning is too important to ignore.

Of course, there’s nothing saying you have to wait until your death to distribute your legacy. It may be just as effective for you to give assets away to your family members while you’re still alive. One of the main benefits of gifting assets is that it gives you the ability to see your legacy put to use.

In 2017 the IRS allows each individual to gift as much as $14,000 to another individual. Married couples can give twice as much, up to $28,000 per recipient. If you give more than that amount, you may have to pay gift taxes.1

Just because you can gift assets, though, doesn’t mean you should. There are valid reasons for and against gifting. Below are a few items to think about as you consider your options:


Long-Term Care Needs

Think you won’t need long-term care? Think again. According to the U.S. Department of Health and Human Services, 70 percent of retirees will need long-term care at some point in their lives.2 Long-term care is extended assistance with basic daily living activities such as dressing, bathing, eating, mobility and more. It is often provided in the home or in a facility.

Long-term care can cost thousands of dollars per month, and you may need the care for years. Also, Medicare usually doesn’t cover long-term care, and Medicaid covers it only after you’ve depleted your assets.

Long-term care considerations should play a role in your gifting strategy. You may need liquid assets later in life to pay for a facility or an in-home care provider. Be sure to consider whether you’ll still have enough money to pay for care even if you gift assets now.


Family Assistance

An inheritance is always helpful. However, it’s possible that your loved ones may have pressing needs that they could address today if you decided to gift your assets. For example, maybe you have grandchildren who need help paying for college. Or perhaps you have grown children who are facing some kind of financial crisis, like a divorce or a business failure. If so, it might be more impactful to gift their inheritance rather than wait until you pass away.

If you decide to gift money to a loved one, be sure to consider how the gift will be viewed by your other children and grandchildren. Will they also want a gift? Will they consider the gift unfair? Think through these questions so you don’t cause any unnecessary drama or conflict.


Probate Costs and Taxes

One of the major benefits of a gifting strategy is that it reduces the size of your estate. This can be helpful if you’ll face probate costs or estate taxes. Probate is the legal process for settling one’s estate. It includes time-consuming and costly administrative tasks such as paying debts, filing taxes, notifying heirs, selling assets and more.

Estate taxes usually only apply to very large estates. However, if you own a business, substantial property or a sizable amount of investments, you could face estate taxes. Gifting assets during your lifetime will reduce the amount of assets that are vulnerable to probate costs or estate taxes.

Ready to develop your gifting strategy? Let’s talk about it. Contact us at Advantage Retirement Services. We can help you analyze your needs and implement a plan. Let’s connect soon and start the conversation.





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17105 – 2017/10/30