Ever think it might be simpler or less expensive to gift your assets to your adult children now during your life, as opposed to having a will and trust drafted?
Here are four reasons why you should reconsider.
Reason one: You could be responsible for paying taxes on those assets. This is what is known as a “gift tax.”
Yet, assuming you avoid paying the “gift tax,” they may still have to pay capital gains taxes based on the home’s tax basis. In other words, if you purchased your home for $100,000.00 and gifted it to your children, then they are receiving the house with a tax basis based on the $100,000.00 purchase price. If (during the time you owned the home), the value increased to $200,000.00. … If or when the children sell the home, they will be responsible for paying capital gains taxes on the difference.
If the house is sold while you are living, you don’t pay taxes on gain up to $250,000.00. So using these numbers, you would not pay a tax if you had not given away the home. But your kids would pay $25,000.00 if you give them the home.
Reason two: If one of the siblings gets divorced, sued, disabled, or becomes bankrupt; their assets (all of them, including what you gifted) are subject to claims by the divorcing spouse, plaintiff, creditor, etc.
Reason three: Imagine there are assets besides the house; assets which you and your spouse need to live on. By transferring those assets to your child or children, you are essentially putting your security into their hands.
Supposing your child is married and then becomes incapacitated or worse, your assets transfer to their spouse. – Now your security rests in the hands of your daughter-in-law or son-in-law.
The alternative …
We aren’t saying there isn’t a chance gifting your assets to your children wouldn’t work out, but any number of variables could cause this “simple and inexpensive” solution to become anything but.
In contrast, having a will and trust drafted could help you and your heirs avoid paying unnecessary taxes, remove undue worry or burden from your heirs, and allow you to delegate just who gets what without worry or interference. . All things considered, a will and trust are the simple and inexpensive option.
Want to learn more about wills, trust, or other estate planning options? Consider making an appointment with a qualified estate planning attorney for a free consultation.

If you are wondering how to get your parent or parents to invest in an estate plan, start by asking yourself one simple question, why do you think they need an estate plan? The answer you come up with will usually dictate the conversation you should be having.

Let’s say for example, you don’t have any siblings and are expecting to be the sole heir of an inheritance. Let’s further suggest that your parents own a home valued at five hundred thousand dollars.

In our “perfect world scenario,” the home forever holds its value without complication.

As sole heir, you realize that if your parents do not have an estate plan, it will be left up to you to pay unnecessary taxes and to hire your own estate planning attorney to assist in probate proceedings.

How much would the taxes and legal fees amount to on a five hundred thousand dollar home?

Conservatively speaking, you are looking at giving up approximately twenty thousand dollars of your inheritance.

The good news is that in our scenario it isn’t too late to get your parent or parent’s to consult with an estate planning attorney.

Ah, but here is the rub …

Fast forward a little later. You’ve explained the scenario to your parents. Curious to know where the twenty thousand dollar estimate came from, they visited our website and read a past article entitled: Estate Plans are Worth the Expense. But even though they read the article (liked and understood it), they still decided not to move forward with having an estate plan drafted, let alone meeting an estate planning attorney.

Now what?

Fear not. All is not lost. How about you try putting your money where your mouth is?

After all, in our perfect scenario, you are the sole heir, and there are no complications – financial or medical – nor will there ever be any, save the eventual passing of your parents. Meaning, it’s you who really benefits the most from your parent’s having an estate plan. Therefore, why not consider paying a part of the estate plan cost? Heck, if it means you keep most of that twenty thousand, why not pay for all of it?

But here is the thing …

Even if you do convince your parents to have an estate plan drafted, you must realize the estate planning attorney’s loyalty is to the client (those whom the plan is drafted for), even if as in our scenario, you were the one who picked up the cost.

So what is the lesson here?

Maybe only this …

You can’t decide what another person does with their assets or money, but if you truly think a family member is in need of an estate plan – whether for financial reasons, medical purposes, or both – please encourage them to visit a qualified estate planning attorney for a free consultation.

If you have read previous articles, you’ve probably noticed our tendency to end articles the following way: if you would like more information on wills, trust or other estate planning options, please contact a qualified estate planning attorney.

Considering our readers are interested in estate planning, and are visiting a website dedicated to estate planning, it seems silly to include this statement. So, why do we do it?

We do it because a great many people see attorneys as being interchangeable. According to fictional television, any attorney can successfully represent themselves in a law suit, or defend a friend in a criminal case. As nice as that would be, it just isn’t true. There are too many areas of law. No attorney is qualified to give advice on all matters.

A personal injury attorney might work wonders for you should someone’s negligence cause serious harm. A family attorney might help mediate your divorce. And a litigating attorney might represent you once it’s discovered one of the aforementioned attorneys ruined your mom’s will and trust, while you as sole heir are left to pay a fortune in taxes and probate costs.

Breathe easy … that was just a clever illustration meant to make a not so subtle point. Kind of like this one …

You wouldn’t hire your dentist to perform foot surgery any more than you would hire your radiologist to perform plastic surgery. Therefore, you shouldn’t seek estate planning advice from your divorce attorney, any more than you should seek divorce advice from your estate planning attorney.

Choosing the right professional for the right job tends to lead to achieving the right result.

As always, if you would like more information about wills, trusts or other estate planning options … you know what to do.

If only Steig Larsson had an estate plan …

Steig Larsson was a Swedish writer and creator of the “Millennium Series” (a trilogy of novels whose titles include: The Girl with the Dragon Tattoo – The Girl who Played with Fire – and The Girl who Kicked the Hornet’s Nest).

So popular were Larsson’s novels that the “Millennium Series” was adapted into a trilogy of movies in his native Sweden. The first novel in the series, The Girl with the Dragon Tattoo was later adapted into a major motion picture in the United States as well.

Unfortunately Steig Larsson died of a heart attack five years prior to the release of the first film. He was fifty years old.

Larsson was survived by his father, brother and a long time girlfriend with whom he shared a home, Eva Gabriel.

Unfortunately, Larsson did not have a valid will or trust.

Here in lies the irony …

Larsson must have held some interest in estate planning prior to reaching literary success.

A will dating back to nineteen seventy-seven was discovered after his death. It bequeathed every asset Larsson owned at that time to his chosen political party. The will, however, had never been signed by a witness. And so, it was legally invalid.

As a result, Larsson’s estate endured a long, bitter, and expensive probate, which ultimately benefited his father and brother, both of whom Larsson had been estranged from for years. They shared ownership of everything, including half ownership of Eva Gabriel’s home.

Eva Gabriel on the other hand (Larsson’s partner of over thirty years) initially received nothing.

After additional and costly legal proceedings, the court changed its mind, and awarded Eva Gabriel sole ownership of the home she shared with Steig Larsson. This proved to be her only inherited item.

Whether it was Larsson’s intention to leave anything, everything, or nothing to Eva Gabriel, or to his father or brother for that matter, we will never know.

We would have known if he only had a valid, updated will. If he had a trust in addition to his will, his beneficiaries could have been spared incredible expense, excruciating drama, and the stress of probate.

As always, should you have any interest in obtaining more information on wills, trusts, or any other estate planning option, please consult a qualified estate planning attorney.