Does it make sense to give an early inheritance to your kids. Remember that giving financial gifts to your children should be done only when you have the support of an experienced estate plan lawyer who can walk you through the various consequences and benefits of doing so. It can be very satisfying to make a financial gift to your children now rather than in your will.
But don’t forget to include all the of the different and most important factors. The current estate planning tax exemption for giving can be split between gifts made through your will and gifts made during your lifetime. You’ll need to evaluate how much you might be able to afford now without jeopardizing your own retirement. And rather you intend to treat all of your children or beneficiaries the same way at the same time.
Giving a financial gift now might make sense for one of your children who needs assistance the most. If you’re in a position to help your children financially, you’ve probably already been thinking about leaving them gifts in their will, but will help with real-life needs that pop up now be more effective?
Giving now rather than later is a preferred approach for many people who consider themselves financially comfortable. In fact, a Merrill Lynch retirement study found that more than 3/4 of retirees felt it was better to pass on inheritance while they were still alive. This requires careful evaluation of whether giving to one child now requires giving to all and the possible impact of overgiving.
Don’t forget that certain members of your family might not be capable of managing a big inheritance in the same way. This means that you should establish a trust or another estate planning tool to help ensure that they are appropriately protected and you can minimize the possibility of them squandering resources. A trust is another way to help protect against the concern of outside predators like a creditor being able to access that inheritance as well.