Should Inter Vivos Gifts Be Part of Your Estate Plan?
An inter vivos gift is any gift you make while living. Few people think of gifts as a helpful component of an estate plan, but there are many reasons to consider making them. At Cavallo & Cavallo, our Westchester estate planning lawyers make all estate planning tools available for clients. We can advise on the best way to limit taxes while fulfilling other goals our clients have, such as helping their children make investments now, not later. Contact us to speak with an attorney.
What is an Inter Vivos Gift?
“Inter vivos” means “between the living,” so this is a gift you make now while alive. By contrast, a testamentary gift is one you make through a will.
- Here are common examples of an inter vivos gift:
- Giving children money for a down payment on a home.
- Giving a family heirloom to one of your children.
- Opening an account to fund a grandchild’s education.
You have made a valid gift when you manifest an intent to make a gift and the recipient accepts it.
Why Make an Inter Vivos Gift as Part of an Estate Plan
Some people might not see the point of making a gift while living. Of course, the recipient might be able to make better use of the gift now than wait possibly 10 or 20 years until you pass. This is one reason many parents make gifts to their children who are buying a home.
But there are other reasons to make gifts:
- Reduce disputes after you pass. After death, a disappointed heir could challenge your trust or will. They might point out you lacked capacity to make the will, in which case a probate judge should set it aside. However, if you make a gift now, the gift is complete as soon as it is accepted. It will be incredibly difficult to unwind a gift 10 or 20 years down the road, when the money has already been spent. Making gifts today can reduce the possibility of probate disputes after you are gone.
- Reap tax advantages. It is possible to gain a tax advantage by making an inter vivos gift. Because taxes are so complicated, you should work closely with a lawyer before making any gift.
- Maintain confidentiality. A will is a public document, so making a gift today can protect your privacy, as well as the privacy of the recipient.
Talk with your estate planning lawyer about whether you want to include giving as part of your overall estate plan.
Not all lifetime gifts are large sums of money or expensive pieces of property. Finding a place for your beloved pets when you can no longer take care of them is a type of inter vivos gift which provides immediate peace of mind to our elderly clients.
Schedule a Consultation
The experienced lawyers at Cavallo & Cavallo create multi-faceted estate plans which might include inter vivos gifts as a component. Call our office to schedule a time to meet to discuss your estate planning goals.
Source:
irs.gov/businesses/small-businesses-self-employed/gift-tax
