Did you know that estate planning can be an essential undertaking? As your parents age, they should take great care to see to it that their plans have been updated to protect their assets and help ensure their final wishes are known and respected. This is why you may want to consider having a candid conversation with your aging parents about their estate plans. This includes gifts and bequests. Let us discuss some questions you should consider asking them on this topic.
Have your parents considered gifting assets? If your parents have acquired a significant amount in assets during their lifetime, they might be considering various options as to what they should do with everything. If they have family members whose future they wish to provide for, protecting their financial legacy should be a prime concern. Gift assets are just one option they can consider to preserve their wealth.
Gift assets allow for the transfer of funds, property, or other items of value while your parents are still alive. If the gift qualifies for exclusion from the annual gift tax, the asset is considered tax-free, and the recipient does not need to file a gift tax return. Gifts can also be made to minors, to be protected until they come of age. However, gifts to minors may be taxed at the rate of an adult rather than a child.
Do your parents have a charity they believe in and want to support? If so, they may want to consider putting aside some of their assets to donate to charity. Take some time to speak with them about causes or organizations that are close to their hearts. They might even want to create an endowment, such as a yearly scholarship in their name. If this is something they want to do, speak to your estate planning attorney about creating a trust to manage the funds.
No matter how your loved ones decide to allocate their assets, an estate plan can help everyone feel better prepared for what is to come. Schedule an appointment with our office today, and we can walk you through the process.