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Giving Large Gifts While You're Still Alive

May 17, 2018 9:00:00 AM The MacMillan Estate Planning Team probate, beneficiaries, family cottage, gifts


At MacMillan Estate Planning, we have the privilege of working with some of the most generous people across Canada, the US, and the UK. It’s our honour to help them to craft personalized estate plans that speak to their priorities in preserving their legacy and safeguarding their bloodline. But at MacMillan, we offer a lot more than will writing to our clients. We specialize in something we like to call life planning. An important component of life planning, which is sometimes forgotten, is whether it even makes sense to wait for heirs to inherit the large gifts you plan to leave them.

Are There Assets You No Longer Use? Many of us have cherished family cottages, but when a senior begins to reach their 80s or 90s, they may no longer enjoy chopping wood and living in the middle of the forest for weeks on end. If you have one (or more) properties that you intend to pass on to your heirs, you may want to consider whether holding onto it until you die makes sense. A cottage, for example, requires regular maintenance to stay in good condition. After some consideration, it may make more sense to pass on the cabin now, so the next generation can begin taking over the responsibility of annual care as the owners.

Could Your Beneficiaries Benefit More Now? Another thing to consider is the ever lengthening average human lifespan. The average Canadian lives to be 82, the UK is just behind at 81.5, and the US is lagging behind with a respectable 79. Most women have their first child at 28, which means the eldest heir will likely be in their mid 50s by the time Mom passes away. While an inheritance is always welcome (or as much as it can be when it means the loss of a parent), most people would probably agree that the money would have been more useful when they were studying in University, having their first baby, or trying to buy their first home. You may want to consider whether your heirs will benefit more from receiving their inheritance now rather than when they’re getting ready to retire themselves.

Reducing the Tax Burden & Probate Expenses. Depending on your jurisdiction, probate fees are often tied to the size of your estate. Your final income tax will also be dictated by the value of your assets. As a way to reduce the tax burden due on your estate, you may want to consider giving large gifts now. Check the rules of your jurisdiction for how much money you can gift to your loved one tax-free. In Canada, you may give an unlimited amount of cash, but gifts of property will trigger capital gains. In the UK, on the other hand, your heirs will owe inheritance tax on your gift if you die within 7 years of giving it to them. Beyond that, you may face at £3,000 limit for tax-free gifts to anyone who is not a part of your immediate family.

Whether you choose to give gifts now or later will always be entirely up to you, but we find that many of our clients appreciate the opportunity to consider the choice. It’s not unusual for clients to have never considered simply giving large gifts now rather than waiting. If you want help crafting a personalized estate plan that asks you to examine your life from new perspectives, contact the expert advisors today at (403) 266-6464. We look forward to scheduling your free consultation.

At MacMillan Estate Planning, our team of professional trust and estate practitioners, chartered accountants, financial planners, and legal professionals look forward to assisting you with the design of your estate plan and will ensure you build, protect, and enjoy your wealth. The information provided is general and may not be suited to your objectives or sufficient to ensure the protection of you and your family. You should not act on this information without providing MacMillan Estate Planning with the opportunity to ensure that it is suitable for your unique situation.

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