Your estate plan allows you to express your wishes and prepare for what happens after you are no longer here. But as with any plan, there is the potential for it to hit road bumps after your death.
If you have concerns about specific assets, you might consider giving them away now instead of leaving them an heir in your will. You can do this by gifting the asset.
Benefits
The biggest benefit to gifting an asset is that you know for sure it will go to the person you want. There is no chance that after you die, someone could object or change your wishes.
It is also beneficial to the receiver. Depending on the value, it is possible gifting it will allow the person to avoid high taxation.
Restrictions
You should be careful about gifting assets that have a high value. The IRS sets a limit on how much you can gift someone without serious tax consequences. Make sure you check the limit because it changes each year. For example, in 2021, the limit was $15,000.
Another consideration is the type of asset. You could find that gifting some assets, including property, can make your taxes more complicated. There may be situations where receiving an item after your death is more advantageous for your heirs, so keep that in mind.
Still, gifting assets now may be the best option in some situations. You should carefully consider your estate and the potential for issues before making a decision about gifting.
