Estate planning law provides you with a number of options when it comes to how and when to share your assets with your loved ones.
Shifts in relationships and changing estate tax laws may cause you to consider transferring your assets while still alive.
If you wish to provide your heirs with money, you may transfer up to a certain amount per year as a tax-free gift to any individual you choose. Currently, the limit is $15,000.
As noted by SmartAsset, you may also change the title of your vehicle from your name to your heir’s name as a gift. According to the Tennessee Department of Revenue, a spouse and heir may not need to pay sales or use tax before registering the car in his or her name.
A benefit of transferring property to your heirs by re-titling your house deed is that they may bypass the probate process. Instead of waiting for you to pass on, an heir may take ownership of your property now. You may re-title a deed with the name of one heir or you may create a joint tenancy with rights of survivorship for two or more heirs.
If an heir decides to sell a transferred property, he or she may need to pay capital gains taxes. In some cases, an heir with financial problems may be subject to a lien placed on a house by his or her creditors.
By creating a living trust, you may still maintain control of your assets. You may transfer all your property into your trust and then use it to generate revenue such as through rental income.
If you decide to sell your property, you may generate funds for other purposes, such as giving your heirs allowable tax-free cash gifts now instead of after your death. Your property may possibly have a lesser value at a future time.