It’s common for parents to contemplate making gifts to their adult children, particularly when a gift would have a meaningful impact. But one wonders: “Is it better to make a gift during my lifetime, or would it be better for my children to inherit instead? Does it matter? What factors should I be considering?”
There are good reasons to make gifts, but there are circumstances that make lifetime gifts unwise. This NEET Note addresses the pros and cons of lifetime gifts versus inheriting. While this Note addresses capital gains taxes, it does not address gifts in the context of large estates likely to have gift or estate tax liabilities. If your estate approaches or exceeds $2.75 million, you need to take additional factors into consideration. Nonetheless, the following should give everyone some food for thought.
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