How To Gift An Early Inheritance
Estate planning is important for adults of all ages. By creating an estate plan, you will have the reassurance that your loved ones will be taken care of when you are gone. You will also have the confidence of knowing that your last wishes will be fulfilled. Sometimes, the person providing an inheritance to a loved one wants to give the inheritance to the loved one while the person is still alive. Whether it is because you simply want to see your loved ones enjoying their inheritance, or your loved ones have specific needs that an inheritance would greatly help with, below are four ways to gift an early inheritance.
Gifting the Inheritance Outright
Gifting an early inheritance outright is one of the simplest ways to transfer ownership of your assets. If you give one of your heirs a significant sum of money now, you may not even have to create or modify documents such as deeds on a home or the title of a vehicle. When gifting early inheritances outright, it is important that you do not give away too much too soon, so you do not leave yourself in an unstable financial position or incur any unwanted tax consequences.
Changing the Deed On Your Home
There are a few options on how to re-title your property now to ensure your heirs become the owner of your property after your death. If you want to add your heir as a joint owner to your home during your lifetime, creating a joint tenancy with rights of survivorship might be a good option for you. This type of ownership means that after you pass away, your home is transferred directly to your heir listed as the joint tenant on the deed and the property will not need to pass through probate for this heir to receive your ownership interest in the property. It is also important to consider that if you change the deed on your property to include your loved one as an owner now, there may be tax consequences or other potential liabilities that could result, so you always want to speak to an attorney before making these decisions.
Paying for Education
By using a tool known as an education exclusion, you can pay for a loved one’s tuition at an eligible post-secondary institution, and it is not considered a taxable gift. This can help you pay for the cost of education for your loved one and relieve them of the financial burden associated with student debt. If your desire is your loved one will use their future inheritance to pay for education, this may be a good option for you.
Paying for Medical Expenses
Similar to the education exclusion, there is also a medical exclusion. Under this exclusion, you can also pay for a loved one’s medical expenses, and it is not considered a taxable gift. The cost of medical care can become extremely costly in St. Petersburg and throughout the entire country. Paying for a loved one’s medical expenses can go a long way in helping them avoid incurring debt they cannot afford to pay and may be a helpful way to give them an advance on their inheritance.
Our Estate Planning Lawyers in St. Petersburg Can Advise on Your Case
If you need to create an estate plan or want to gift your loved ones an early inheritance without incurring certain penalties, our St. Petersburg estate planning lawyers at Legacy Protection Lawyers, LLP can provide the sound legal advice you need. Call us now at 727-471-5868 or contact us online to schedule a consultation.