all assets given before leaving planet
I agree with the previous answer that there are other estate planning documents that you may need to consider such as a Community Property Agreement (if you are married), or a Health Care Directive, or Durable General Power of Attorney for financial and/or health decisions.
Since you live in Washington, and want to leave your entire estate to your only child, you may not need to sign a Will because under Washington law your child is your only heir at law. So whether you have a Will that leaves everything to your child, or rely upon Washington law to acomplish the same purpose, your child will receive your entire estate after your death. You should consult with an Estate Planning Attorney before you make this decision.
The more pertinent question is whether it is wise for you to give your assets to your child before your death. This is a complex question that requires much more information that provided in your inquiry. You should consult with an Elder Law Attorney in your community to secure the counsel needed to analyze whether it is appropriate to do so under your circumstances. I would simply point out that gifting assets raises serious potential questions relating to Gift and Estate Tax laws. It will also likley incur a Medicaid transfer penalty period that will preclude your eligibility for Medicaid should you need long-term care during the five-year "look-back period" following the date of the gift. It may also cause a serious increase in the amount of the Capital Gains Tax that your child may have to pay when they sell the asset if it has increased in value since you acquired the asset. If we are talking about your home, this potential consequence could cost your child many thousands of dollars of additional Capital Gains Tax. Also, if your home is subject to a Senior Citizen Tax Exemption from the general real estate tax, you will likely lose your exempt status.
In addition, once you transfer the ownership of the assets to your child you will have no more control over how the assets are used, and no right to compel your child to use them for your benefit. In fact, the assets will be subject to the claims of your child's creditors and could be completely lost if your child gets into financial trouble
The foregoing are just some of the reasons that most Elder Law Attorneys would caution against making such gifts.
I hope that this is helpful to you. Good luck with your decisions.
Renton and Kent, WA
I believe there's a Chinese wish that goes something like this: "May your last coin and your last breath go at the same time." Unfortunately, that's very difficult to do. Giving away property to your child is a nice idea, but you still need to live on something. If you give it away, and then your child winds up having to support you, there could be gift tax consequences for your child. Not to mention the tax consequences for you in giving your property away in the first place. One example of a potentially major tax consequence would be if you were to give away your home prior to your passing. When your child goes to sell it (hopefully not before your death) he or she has to pay capital gains taxes on the spread between the total of what you paid for the house plus improvements, and what it sells for. If instead you own the house until your passing, and your child then sells it, most, if not all, capital gains can be avoided.
As mentioned in previous answers, not having a will leaves it up to the State of Washington to write one for you. If you are not married and have only one child, he or she would receive your property. If your child predeceases, his or her children would receive your property. At least with a simple will you can make provisions for minor grandchildren (saves a guardianship or a court-supervised trust), name who you want as executor and some back up choices, ask that your executor be able to manage your estate without having to go back to court for everything, waive bond, and on and on. You are in control rather than the State.
There are ways to avoid court intestacy administration (no will) or probate (with a will) by certain asset titling and beneficiary designations, but before doing that, you should definately consult with an attorney. (I know...that's what all of these answers say!). Be very careful in giving your child property and putting him or her on title as you could wind up having those assets taken by his or her creditors.
I agree that it is also very important for you to have durable powers of attorney to name your child, and one of two back-ups, to take care of your financial and health matters if you become incapacitated. You do not want your child to be stuck with the restrictions and expense of a court-supervised guardianship.
Whether or not you need a will depends on whether you own real property while you are here, or not. Leaving a properly executed will for your only child may seem like it is a lot of work, but it isn't and it puts your heir in a better position. For example, if your estate needs to be probated and there is no will, then your heir will probably have to post a bond and get court approval to sell anything titled in your name. The decision to hand over everything before you are gone can create tax issues that would *not* arise if you did a will instead. There are lots of attorneys who can give you personalized advice based on a close review of your situation, and frankly that is a better idea. Hope this helps - Elizabeth Powell
That depends on whether you want certain items to go to certain children. If you have specific gift requests, then a Will should be done so that the children do not fight over your assets (happens a LOT, so don't assume they will handle things peacefully). You may also want an Will to name an executor who will handle any probate you may need.
Feel free to call sometime and we can discuss whether a Will is necessary. Happy to help. 206.747.0313
Beyond a Will, and more importantly, a Power of Attorney and living will (medical directive) are definitely beneficial for everyone so that you have designated person to make decisions for you if you are incapacitated - and what means you want or don't want used to sustain you.
The short answer is "No." But there are other consequences of gifts which it would be wise to talk to an attorney about.
One example: If you give real estate to your child, the child would have to use your tax basis for calculating capital gains tax. You could give them a "stepped up basis" if they received the property through your estate. If your basis in the property for capital gains is low, this could cost your child a lot of money when they decide to sell.
Talk to an attorney about your estate plan. It is worth the extra cost.
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