Myth 9: Can’t I Simply Gift My Property to my Kids (or other Beneficiaries?)
While it may be easy to simply give assets away during your lifetime, there are many reasons why this would not be a good idea and could yield disastrous results. Once you give assets away, the donee of that gift has no obligation to ever give those assets back should you need them. There can be a large income tax and gift tax consequence if you give property away during your lifetime. Lifetime gifting could also make you ineligible for government assistance benefits should you need them for long term care. Furthermore, lifetime gifting exposes the asset given away to the donee’s creditors, including a divorcing spouse of the donee. It is important to note that simply “putting your child on your bank account” to help manage your money is often set up in a way that adds your child as a joint owner on the account, which entails all of the lifetime giving issues previously discussed. These issues can be avoided with the expert advice of an estate planning attorney.