Traditions, Gifts, and Giving
For many of us, there’s nothing more heart-filling than the sight of a Christmas tree, glowing and luminous, with piles of colored gifts below. It takes us back to all of those happy holiday memories: the house full of family and fun, grandma’s latkes and brisket, and mom’s eggnog that always made Uncle Jim “take a nap” before dinner. Now your home is full of your children, your grandchildren, and some new family traditions. You are building your own legacy, but the love is still the same.
According to the National Retail Federation, more than a third of American families plan to spend at least $1,000 on holiday gifts. While giving wrapped gifts is a tradition many of us look forward to each year, it’s also a good time think about how you are building your legacy and how you want to share it with those you love. In the last post we talked about giving monetary gifts to share your legacy during your lifetime. In this post, we’ll discuss how you can give real property as well.
Gifting Real Property
You can consider gifts of property as part of your living legacy. For example, you and your spouse would like to give your vacation condo to your son. The value of the condo is $80,000, but you have only $50,000 in equity and a mortgage balance of $30,000. In December, you and your spouse sign a deed naming your spouse and your son as joint tenants. You have given your son your half of the equity in the condo, or $20,000. Because you and your wife will be presumed to have the double exemption of $30,000, the gift will be tax free. Next year, your wife can give your son her remaining half of the condo at a value of $20,000. Again, the marital double exemption will apply up to $30,000, so next year’s gift will also be tax free. You will have managed to distribute property during your life time without tax consequences.
Think Before You Give
Lifetime giving is increasing in popularity because people live much longer than they once did. If you wait until your death to pass on assets, many of your beneficiaries may be nearing old age themselves. While you should never give away money or assets if it make you feel uncomfortable or financially insecure, helping your grandchildren pay for college or helping your kids buy their first house can be very rewarding.
Your legacy is all around you. Take the time this year to think and plan for sharing your legacy with those that you love. And then put on your ugly sweater, plug in that gorgeous tree, and pass the cranberries! We can help, call us, 501.221.7776.