Give a gift to your child now to avoid a large inheritance tax later. There are benefits to sharing the wealth early. If you are planning to pass down that cabin at the lake to your children, consider gifting the cabin before it appreciates in value. I would rather deal with gift taxes now on a $100,000 vacation home than to have the government assess an inheritance tax on the same property years later when the home is valued at $1 million.

Giving your children property, investment assets or shares in the family business offers new opportunities. The benefits of gifting today go beyond substantial tax savings. Of course, you can enjoy your children's reaction to the gift. More importantly, you can assess how your children handle the new responsibilities of property ownership, additional income or the family business. You have a chance to guide your children in managing the gift in a responsible manner. Your children may need you more than you realize.

Develop a gifting plan today. Start by clarifying your life goals and your family goals. If you are married, ask your spouse for input and feedback. Meet with your CPA and an experienced estate attorney to learn about your options. The attorney and CPA will help create a gifting plan and may involve other professionals such as an insurance advisor, a financial planner and your general counsel. Ask your attorney to draft or update your will to ensure that your assets are distributed as you see fit now and in the future.

Bob Sullivan is a Stonefield Josephson Principal and business consultant. For additional information on gifting to family members, contact Bob Sullivan at 310-432-7416 or bsullivan@sjaccounting.com.

 
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