'Tis the Season -- By: Stella Knight

It’s the day after Thanksgiving and many people are beginning their preparations for Christmas or another holiday celebration. Many people, myself included, will begin shopping for gifts for their loved ones.
Many of my past articles have stressed the importance of estate planning. Yes, estate planning - whether it’s just writing a will or incorporating additional legal documents such as a health care power of attorney or durable power of attorney - is a wonderful gift to your family and loved ones. So with that being said, I want to provide you with some additional ideas for holiday gifts.
Cash. Yes, cash is still king – one size fits all. Any individual (called a “donor”) may make annual gifts of up to $14,000 to any number of people (called “donees”) each year, free of any gift taxes (called “annual exclusion gifts”). If the individual is married, the married couple can combine their separate $14,000 annual exclusion gifts to make gifts of up to $28,000 by either using their separate funds to make the gifts or by using one spouse’s funds and consenting to treat the gifts as made one-half by each spouse.
Stock. Giving stock is a great way to get young people interested in investing. However, if the individual is under the age of 18, you will need a custodial account. As mentioned above, gifts of stock may also qualify as annual exclusion gifts. All the income and appreciation on the gifted property belong to the donee after the date of the gift.
Land. Keeping family land in the family is important. Many parents have decided to give a lot or piece of farmland to a child or grandchild. This gift may be an outright gift which allows the individual to borrow against the land and build a home or purchase a mobile home and place it on the lot. It’s important for the parent to remember: when you give the gift of land, you no longer have control over it. If the child’s lot is located next to yours and they miss a loan payment and the property is foreclosed upon, you may have new neighbors. Sometimes parents give land to a child and retain a life estate in the land. This is not a completed gift. The property will be included in the parents’ estate at his or her death and the child doesn’t have full ownership interest in the property until both parents die.
Forgiveness. In my law practice of estate administration (the legal process of settling an individual’s estate after he or she has died – either with or without a will), I have seen many hurt and dysfunctional people. Why? Because of unresolved conflicts and miscommunication. When you are not here, there will be no one to answer the unanswered questions or resolve the conflicts and miscommunication. Sometimes I have recommended that a client write a letter of explanation or forgiveness to include with their estate planning documents. If you are distributing your estate in an unusual or unequal manner among your children, why not leave a letter explaining this distribution scheme? If you are omitting a child altogether, leave an explanation so no one is left to wonder why you did it. This may save your executor/administrator much time and expense and even avoid costly litigation.
Time. Remember the gift of your time. It’s the most precious gift you could give.
Whatever the gift, giving during your lifetime will bring you joy and satisfaction. You can also see how the individual uses or manages the gift. Your attorney will assist you and advise you in drawing up the documents to carry out your desires. You can leave a positive legacy.
Tax consequences of gifts are beyond the scope of this article so be sure to consult your tax adviser.

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'Tis the Season -- By: Stella Knight 'Tis the Season -- By: Stella Knight Reviewed by kensunm on 7:00:00 PM Rating: 5

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