Q: Should I gift major assets to my children?
If you are wary of the following consequences, you may not want to gift your home, or other major assets, to your children:
- Your children could end up having to pay a much higher capital gain tax when selling the home, and by estimation, such tax would be higher than the estate tax and lifetime gift tax that might otherwise incur;
- Your home may very well lose the property tax exemptions available for senior citizen homeowners;
- You may lose the home to your child's divorcing spouse or creditors;
- You can get evicted if your child does not want you to live in that home;
- Your children and grandchildren benefiting from this transfer may lose their eligibility for some financial awards or other benefits.
Q: Does this mean I should always hold on to the assets until I die?
No. There are many legal ways to pass your assets to your loved ones while saving money on taxes. You should always consult an estate planning attorney to learn about your options.
Q: Who should I work with to make lifetime gifts?
You will need to work with your attorney, your accountant, and maybe a appraiser (to assess the value of the real estate property or business shares gifted).