Transferring your estate during your lifetime has certain benefits. Holding onto your wealth until death is not always the best strategy for your heirs. When thinking about the legacy one wants to leave behind, most people plan to bequeath all their assets to loved ones at death. However, there is another option, which is to start gradually giving away your assets during your lifetime. It’s known as “giving while living” and it’s a strategy that offers many advantages. Perhaps the most practical is that it gives benefactors the ability to exert control over how their assets are used.
Donations are also useful among siblings. We commonly prepare donations when one sibling is already living in the parents’ house, and the other siblings want to give their interest to him or her. If there are other assets that the other siblings do want their share of, a donation is a better option than a renunciation of the estate as it allows the heirs to cherry-pick which assets they will keep and which they will give to their sibling(s). If you are considering transferring your estate during your lifetime, or wish to give part of your inheritance to another heir, call an experienced estate planning lawyer today.
Types of Donations
Property can neither be acquired nor disposed of gratuitously except by donations inter vivos or mortis causa. A donation inter vivos is an irrevocable contract by which a donor, gratuitously gives a thing to a donee. A donation inter vivos happens immediately. A donation mortis causa takes effect at the death of the donor by which he disposes of the whole or a part of his property. A donation mortis causa is revocable during the lifetime of the donor and is usually made as part of one’s last will and testament.
Acts of Donation in the Context of Estate Planning
Someone may choose to donate property to a loved one or a charitable organization for a number of reasons. If someone wants an heir to receive a particular piece of property, they may choose to donate it to them during their lifetime rather than leaving it by will. The benefit of doing so include getting to see them enjoy it, avoiding having the title transfer slowed by the probate process, and possibly even tax savings.
While Louisiana no longer has an estate or gift tax, there still are Federal estate and gift taxes. If your estate exceeds the Federal estate tax threshold you may find it beneficial to donate property each year to your loved ones. In 2023, the Federal gift tax exclusion is $17,000 meaning that you can donate up to that amount to as many people as you like without them having to pay a gift tax.
New Orleans Estate Planning Attorneys
Bowes, Petkovich & Palmer, LLC is a Gretna law firm that has served the New Orleans area since 1980. Our experienced estate planning lawyers can analyze your situation and efficiently prepare your act of donation to transfer parts of your estate during your lifetime. We take pride in offering a personal and trusted experience. Call us today for a free consultation and find out why so many of our clients come back to us.