Estate gifts are simply what they imply. They are money offered to family members and loved ones by the owner of an estate. Offering gifts is one of the best ways to avoid paying huge estate taxes. However, once the value of a gift offered crosses a certain threshold you’ll have to pay tax for the gift.
As we progress, we’ll be taking a look at real estate gifts and your estate. However, before we move further, let us take a brief look at what estate planning really is.
Estate Planning Explained
Estate planning is very important, which is why you need to make one while alive to ensure that your family and loved get a portion of your assets after your demise. Also, before you consider making an estate plan, it is crucial that you have a little knowledge of what this plan entails. You can plan for something you have zero idea if, right? So, let’s take a brief look at what estate planning entails.
Estate planning is basically plans made to take care of ones estate after his or her death. This plan covers:
- The distribution of the decedent’s assets
- The creation of important estate planning documents like trust, power of attorney
- The management of the deceased assets
- The payment of estate taxes and unpaid debts
- Creation of a will
It is not shocking that about 74% of Americans find estate planning confusing. I bet it’s because whoever talked to them about it, wasn’t quite clear. So, if you fall among the category of people who find this topic hard to understand, below are some simple steps for estate planning. Hopefully, when you get to the end of this article, you’ll find this topic as interesting as your favorite novel.
Importance Of Estate Planning
Estate planning, no doubt, remains one of the most important plans you’ll make while alive. This plan has the potential to shape your future and the future of those you care about. If you fail to create an estate plan, your assets won’t be distributed to your family, loved ones, and friends just like that; the state will have to step in and share your assets according to the intestate law. Lots of things could go wrong during this process as several people who feel that they deserve a portion of the deceased’s asset will be left put.
With an estate plan in place, you get the opportunity to choose who inherits and manages your assets. You also get the chance to decide how you want to be taken care of should you become incapacitated. Also, with an estate plan, you can select guardians for those minor children of yours. You can lock up fund in a trust, which will be available to your minor children when they become of age. Indeed, estate planning, is a plan that can secure your future and the future of those you care about.
An estate planning attorney can help you plan a good estate. However, if you lack the funds to hire one you can leverage one of those online estate planning tools to plan your estate.
What are Estate Gifts and how do they affect your estate?
There exist lots of reasons why gifting properties to family members is a brilliant idea, however, the process isn’t always as easy as it seems. Gifting properties to your family can help prevent the payment of estate taxes, which are sometimes large.
Regardless of the money involved, you can actually transfer ownership of an assets without money changing hands. This process goes by two names; it is regarded as deed of gift or transfer of gift, both definitions are quite similar.
There are certain requirements you’ll have to meet to be eligible to offer a gift as far as estate planning is concerned. First off, the owner of the property will have to be of sound mind and must be acting according to their will.
Before you proceed to offer gift to your family always ensure that you see legal advice from a competent estate planning attorney. Also, before you gift a property, you must ensure that it has no debt attached to it like a mortgage loan.