Many people use estate planning to ensure their loved ones benefit from their assets after they die. However, you don't have to die for your children to benefit, legally, from your wealth. Here are a few strategies you can use to ensure that your children can get some of your assets while you are still alive:
Give Cash Gifts to the Kids
From 2016, parents can give each of their children up to $14,000 tax-free money every year. If you are married, then your spouse can also give each of the kids the same amount of money tax-free. This effectively doubles the tax-free gifts each of your kids can receive from you every year. You don't have to put the money in a trust fund; you can just give it to your kids directly, and neither you nor the kids will pay taxes on the money. Prepare to pay taxes for any amount over the exempted ones.
Set Up Trusts for the Kids
Another alternative is to set up trusts for the kids from which they can get "allowances" every year. You get to specify how the income from the trust is distributed to each of your kids. You get to choose between a revocable trust (whose terms you can cancel or modify at any time) and an irrevocable trust (whose terms you cannot change). Be careful with an irrevocable trust because anything you put in it is cast in stone; involve an attorney, such as one from a place like the Law Offices Of Harry G Lasser, to guide you through the process. Depending on your state's laws, you may have the choice of managing the trust on your own (be your own trustee) or appoint another third party to the position.
Deed Your Properties to the Kids
If you have real estate property you wish your kids to enjoy while you are still alive, you can deed the properties over to them. There are several ways of doing this, each with its merits and demerits. For example, you can use a quitclaim deed (an inexpensive strategy), which is a legal way of declaring that you have ceded all your interest in the property to your kid. Keep it in mind that a quitclaim deed doesn't negate your financial obligations; for example, you are still responsible for the property's tax obligations you incurred before deeding the property to your child.
As you can see, there are several ways of passing wealth to children without estate planning. Don't forget to involve legal experts in all these processes if you want everything to run smooth.
Share26 September 2018
The laws governing child custody and guardianship can be confusing. As a family attorney, I have helped many clients gain legal guardianship over a foster child or a relative's child. Getting legal guardianship of a child you are caring for is important because you need to be able to make decisions about that child's education, health care and other matters. This blog will help you navigate the world of legal guardianship and show you how to take steps to get guardianship over a child whether the child's parents are cooperative or not. Legal guardianship does matter even if a child is not going to be adopted. I hope to help people find the way to get this done.
