Your financial legacy is a reward for a lifetime of hard work and financial success. Many affluent Americans want to give their children money, but aren’t sure about whether to make a living gift or leave money in their estate. This leads to the question: Should I give my children money now or later?
When is the right time to give to your children? Should you gift them assets now or wait to give it all away only after you’ve passed? It’s a good question and can be a difficult calculus.
Forbes recently tackled this difficult issue a short while ago in an article titled “Should I Gift Money To My Children Now Or Later?”
The original article is a sort of evolving discussion between two advisers who end up giving solid points to support either option. And, that’s fair. There really are two ways to approach this dilemma because there are different motivations in either direction.
Giving now is simple and can be an entirely different act – emotionally, financially, and legally – from giving at death. It raises issue of control (how much and when), issues of need (who needs it most now and later?), trust (can they be trusted to act wisely?) and, yes, mortality (do you wish to be there to see them enjoy and make good use of your generosity?).
One thing is for certain. The longer you delay making this decision, the longer time you have to mull it over.
For many it will be an important transition if they choose to gift in life, emotionally or financially, and it will likely be a gift worth making wisely and to the greatest advantage of all. Competent counsel can help think with you, identify the legal or financial consequences of either option, and help you structure the best transition for you and your family.
Reference: Forbes (April 23, 2014) “Should I Gift Money To My Children Now Or Later?”