Estate planning can be a complicated subject in Michigan. Not only can it be a fearful experience as it acknowledges mortality, but there could be concerns about disputes arising among relatives as to how the assets are divided. Tax implications are also a common worry. For many, gift-giving is a useful strategy to address a variety of concerns with family members and to give to groups and organizations the testator cares about. There are aspects of gifting that people need to understand as part of the estate planning process. Legal advice can always be beneficial with these considerations.
Gifting is a testator donating to an organization. It could be a non-profit organization or some other group. There are other terms for it including a legacy. The gift could be any amount the testator wants and does not need to be connected to income. This is an alternative for anyone regardless of income level and wealth. It could be done once or as an ongoing series of donations. Money can be donated as a gift, but so too can assets that the person wants to be converted for the recipient’s use. Anything can be included. Real estate, collectibles, jewelry, insurance policies and stocks are examples.
The testator might have been involved with an organization and wants that help to continue after death. Gifting is useful toward that end. Even while the testator is alive, gifting may be essential as part of an estate plan because there can be tax benefits for donating to charity. Transferring these properties can avoid the capital gains tax. For those donating after death, the gift is exempt from the estate tax.
Despite the known benefits of gifting and positives that accompany it, it is still important to understand how to incorporate the idea into a comprehensive estate plan. There may be hidden considerations that could negatively impact relatives and other aspects of the plan. With a will, trust or any other estate planning device, discussing the goals is imperative. A legal firm experienced in all areas of estate planning might be able to help.