The ability to help your grandchildren out financially is a great thing, and most grandparents jump at the chance to do so. However, before gifting assets or money to grandchildren, there are some important legal issues to consider. If you live in Michigan and would like to gift assets to your grandchildren, below is some information to help you get started. In addition, it is highly recommended that you contact a
Michigan estate planning attorney for guidance prior to gifting assets to your grandchildren.
Are you really making a gift?
The first thing to consider when making a gift to a grandchild is whether you expect anything back in return. If so, then you aren’t really making a gift. And if you expect something in return, you should have a Michigan estate planning attorney help you put it in writing.
Are you being fair to all of your grandchildren?
While this isn’t necessarily a legal issue, it’s important to make sure you are treating your grandchildren fairly when making a gift. When your grandchildren feel they are being treated unfairly, this can cause tension within the family. In addition, this can even lead to legal action under certain circumstances.
Have you considered the tax implications of your gift?
Although there will be no tax implications for most gifts, gifts in excess of a certain amount must be reported on a tax return.
Have you considered 529 plans?
Many grandparents want to help out with their grandchildren’s school costs. A great way to do this is by opening a 529 account for each of your grandchildren. These accounts are tax-deferred, and the income and growth is never taxed as long as the funds are put towards higher education expenses.
Are you gifting too much?
Although giving is great, you need to make sure that you have plenty of money available to take care of your own needs. A series of large gifts can rapidly deplete your savings. When making gifts, always keep your current and future expenses in mind.
Are you taken care of?
Finally, always consider the possibility that you may need additional care as you age. This can include medical care and assisted living expenses. In addition, if you can’t afford to pay for your own long-term care, any gift you make may render you ineligible for Medicaid, so always consult a Michigan estate planning attorney before making any gift.
Contact our Michigan estate planning attorney today
If you need assistance with estate planning in Michigan, it is imperative that you hire an experienced Michigan estate planning attorney. A Michigan estate planning attorney can assist you with all aspects of estate planning, including gifting assets to grandchildren, drafting a will, choosing an executor, or simply beginning the estate planning process. If you’d like to begin the estate planning process, please contact one of our experienced Michigan attorneys for a consultation.