Can lifetime gifts be part of a larger estate plan?

On behalf of Scaringi Law posted in Estate Planning on Monday, February 15, 2016.

Gone are the days when individuals leave large inheritances for their heirs or loved ones, at least according to a recent article. Instead, the new trend in estate planning appears to be gifting during one's lifetime, maximizing retirement comfort, and leaving smaller bequests to heirs.

According to one commentator, gifts made during an individual's lifetime are satisfying because the individual is able to see how his or her gift is used. Instead of worrying that heirs may squander a lump sum inheritance, an individual can do good deeds in the present.

Of course, no one knows the future, and matching planned giving with one's lifespan may seem like a guessing game. Our law firm understands this catch-22, and has strategies for helping individuals preserve their assets through gift transfers, trusts and other instruments. That approach requires anticipating various scenarios, including long-term care or assisted living needs.

A revocable trust can be one way to maintain control and flexibility over one's assets, while still creating a structure that will avoid probate after one's death. An individual can serve as both the trustee and beneficiary of a revocable trust while he or she is alive. Upon death, the instrument becomes irrevocable, and the successor trustee assumes control. Our law firm has provided such trustee services to our clients, administering trusts for the benefit of the named beneficiaries. That role includes managing the assets comprising the trust principal, making investment decisions, and distributing payments or assets to the beneficiaries in pursuant to the trust instructions.

Before making planned gifts, an individual should have an estate plan in place. A basic estate plan may include a will, living will and power of attorney. We can also provide counseling on additional issues that elderly clients may be facing, such as nursing home or Medicaid applications, preserving assets after entering an assisted living facility, and the pros and cons of insurance and annuity products.

Source: Law Professor Blogs Network, "You Can't Take It to the Grave - So Don't," Gerry W. Beyer, Feb. 5, 2016