Should You Distribute Your Assets Now?


There are no hard and fast answers in estate planning. No two families are the same, so there's never going to be a one-size-fits-all solution to estate planning needs. That being said, there are some compelling reasons to consider distributing your assets now.

Many people choose to make lifetime gifts so they can see the effects of their generosity on their heirs. If your children are struggling to establish financial independence, a gift that helps them with the downpayment for a first home, relocate for a new job, or start their own business will provide benefits for many years to come. If you have grandchildren who are getting ready to attend college, you may wish to provide tuition assistance so as to minimize their student loan burden.

Giving gifts to heirs must be considered carefully so as to avoid creating an unnecessary tax burden. You will want to meet with an estate planning attorney to see how your plan will be affected by gift tax laws.

Making annual gifts up to the $14,000 exclusion point is generally a good way to reduce the size of your taxable estate. However, some types of gifts are automatically exempt from the federal gift tax, regardless of their size. For example, gifts covering another person's tuition or medical expenses are tax-exempt as long as you make the payments to the institution and not directly to the gift recipient.

One useful way to give gifts to your heirs is to provide stock that was purchased at a much lower price than its current value. When your heirs sell the stock, they'll pay taxes based on the amount you paid for it. If they're in a lower tax bracket than you are at the time, this can be a substantial savings that will allow you to keep more of the profit in the family.

How Can We Help?

If you are in need of legal representation relating to an estate planning issue or have questions about how the gift tax affects your ability to distribute assets while you are still alive, please call our office at (626) 683-8113 or email us at