It’s common to consider how to manage your assets and support your family as you age. In Massachusetts, you have the option to give an inheritance to your children while you are still alive.
Understanding gifts and transfers
When you give assets to your children before you pass away, the law usually sees it as a gift. Gifts can include money, property, or valuable items. In Massachusetts, you can give up to $17,000 per person per year without triggering federal gift taxes.
Using trusts for inheritance
Another way to transfer assets is through trusts. Trusts can offer control over how and when your children receive their inheritance. There are different types of trusts, such as revocable and irrevocable trusts, each with its own set of rules and benefits. Trusts can help protect assets from creditors and ensure the beneficiaries use them according to your wishes.
Benefits of giving inheritance early
Providing an inheritance to your children while you are alive allows you to see them benefit from your generosity. It can help them with significant expenses like buying a home or paying for education. Additionally, early inheritance can reduce the size of your estate, potentially lowering estate taxes upon your death.
Potential risks and considerations
While giving an inheritance early has its benefits, it’s important to consider the risks. Once you transfer assets, they are no longer under your control. This means you cannot change your mind or reclaim those assets if your financial situation changes.
Planning ahead for your family’s future
Planning to give an inheritance before you die requires careful consideration and strategy. By understanding the options and potential consequences, you can make informed decisions that benefit both you and your children.
