Planned Gifting Within Your Estate Plan

February 27, 2019

Delaware County Wills and Estates Lawyers discuss planned gifting. Planned gifting and estate planning allow people to allocate their money and valuable assets to individuals or charitable organizations that they hold near to their heart. Careful planning can help alleviate stress and financial tax burdens on beneficiaries while allowing donors to continue to benefit from interest and dividends while they are still alive.

In a large majority of cases, people create wills and trusts that will distribute their assets after their death, but there is a growing trend where people are opting to gift while they are still alive. In either case, there are rules to follow to make the most out of your gift-giving.

Giving to Family Members

There are several ways that a person can leave money, property, or valuable assets to a loved one. A will can specify individuals and specific property or money that is to be given to them upon the death of the grantor. This type of inheritance is subject to taxes if the estate reaches a certain level of value. The beneficiary is responsible for paying these taxes out of the inheritance upon disbursement.

A trust can be set up for beneficiaries with specific stipulations for disbursement. A trust set up for a minor child may specify that the money is to be used for college or dispersed once the child reaches the age of maturity. A trust may also be set up for a group of beneficiaries, such as several grandchildren within the same family with specific terms and conditions set by the grantor. Since a trust is not subject to probate, the beneficiaries may be able to claim their gifts faster and avoid court fees and estate taxes.

Gifts can also be given to children, grandchildren, and loved ones while the grantor is alive. This growing trend allows the grantor to enjoy seeing how the beneficiaries choose to enjoy their gift. It also helps with planning future gifting, and lower the tax burden on inheritances.

Charitable Giving Through Estate Planning

Gifts to charitable organizations give grantors an opportunity to leave a legacy to an organization that is special to them. Nonprofits such as churches, private schools, activist groups, and medical research teams that rely on donations to continue their mission are popular choices. Donors can name the organization as a beneficiary in their will or trust, potentially saving a significant amount of money on estate taxes.

A gift annuity is another option that allows a donor to continue to receive interest dividends on a lump sum of money they are leaving to a charity. Once they pass, the remaining amount in the annuity is passed onto the beneficiary. Donors can also gift assets, such as real estate and stock, through a gift annuity. The nonprofit can sell the assets upon the death of the grantor without having to pay capital gains taxes. An experienced and reputable estate planning lawyer can help you establish a legal will, trust, or charitable gifting plan that ensures your wishes are carried out.

Delaware County Wills and Estates Lawyers at Eckell Sparks Offer Comprehensive Will and Estate Planning Services

If you are planning to write a will or establish an estate plan, call the Delaware County wills and estates lawyers at Eckell, Sparks, Levy, Auerbach, Monte, Sloane, Matthews & Auslander, P.C. at 610-565-3701, or contact us online to schedule a free consultation today. Our Media and West Chester, Pennsylvania offices serve clients throughout Delaware County, Chester County, and Montgomery County.