When you want to give or transfer property, there are mainly two choices: inter vivos transfers and testamentary transfers. Each has its own advantages, but inter vivos transfers—done while the person is still alive—are often better for some important reasons.
One great thing about inter vivos transfers is that they have instant effects. Property can be given right away, which means the person receiving it can use it immediately. For example, if a parent wants to help their child buy a house, they can use a gift deed to transfer money for a down payment without waiting until the parent passes away.
Testamentary transfers happen through a will, but they usually need to go through a process called probate. This can take a long time, cost money, and make a person's finances public after they die. By choosing inter vivos transfers, people can skip the probate process altogether. This way, the person receiving the property can use it right away, without any delays or legal issues.
Inter vivos transfers can also help lower estate taxes. If someone gives property away before they die, it can reduce the overall value of what they’ll leave behind. This might mean less tax for their heirs. For instance, if a person gives a house worth $300,000 to their child, that amount is no longer part of their taxable estate.
Many people like inter vivos transfers because they keep more control over what happens to their property. They can set rules for how the property should be used or even take back the transfer if things change. For example, a parent could let their child live in a house while also keeping the right to stay there until they die.
In short, inter vivos transfers offer more flexibility, control, and immediate benefits than testamentary transfers. They allow people to make smart decisions about their property while they are still alive, ensuring their wishes are followed without the hassle that can come with a will.
When you want to give or transfer property, there are mainly two choices: inter vivos transfers and testamentary transfers. Each has its own advantages, but inter vivos transfers—done while the person is still alive—are often better for some important reasons.
One great thing about inter vivos transfers is that they have instant effects. Property can be given right away, which means the person receiving it can use it immediately. For example, if a parent wants to help their child buy a house, they can use a gift deed to transfer money for a down payment without waiting until the parent passes away.
Testamentary transfers happen through a will, but they usually need to go through a process called probate. This can take a long time, cost money, and make a person's finances public after they die. By choosing inter vivos transfers, people can skip the probate process altogether. This way, the person receiving the property can use it right away, without any delays or legal issues.
Inter vivos transfers can also help lower estate taxes. If someone gives property away before they die, it can reduce the overall value of what they’ll leave behind. This might mean less tax for their heirs. For instance, if a person gives a house worth $300,000 to their child, that amount is no longer part of their taxable estate.
Many people like inter vivos transfers because they keep more control over what happens to their property. They can set rules for how the property should be used or even take back the transfer if things change. For example, a parent could let their child live in a house while also keeping the right to stay there until they die.
In short, inter vivos transfers offer more flexibility, control, and immediate benefits than testamentary transfers. They allow people to make smart decisions about their property while they are still alive, ensuring their wishes are followed without the hassle that can come with a will.