They thought it would be easier
Is gifting assets to children during your lifetime worth it?
As the objective of the group turned to Pam’s preferred activity, eating cake and gossiping, it suddenly dawned on her that despite the pitfalls discussed previously, there might be some benefit in gifting assets to her children.
“What do you think of this idea girls?” asked Pam, “I know that there might not be any inheritance tax advantages to gifting assets whilst retaining a benefit in them, but wouldn’t it make the administration of my estate easier when I pass, would I still need probate if I transferred my house to my children?” asked Pam.
Marjory, having already pondered this particular conundrum, and having also taken advice barked “No Pam”, slightly too bluntly for Pam’s liking. “There will still be an abundance of paperwork to be completed, let alone the Inheritance Tax Forms, and just because you gift some of your assets to your children, if even if just one asset you retain requires probate to deal with, like the premium bonds you’re always winning with, then all of the assets you’ve given away will need to be valued etcetera and included on the probate application” preached Marjory, as if these were the exact same words her solicitor had used. “You are also forgetting the major risk of giving your children control of assets which you hope to remain using and the possibility that they may get divorced or have financial difficulties, which might result in those assets being sold or transferred to someone else” said Marjory, feeling quite impressed with herself.
“Yes, you’re right as usual” said Pam, rather meagrely. “On a happier note, these brownies are to die for” purred Mary, thankful that the conversation could now turn away from the gloom of considering one's demise.
It is never a good idea to transfer assets to someone else purely to make the administration of your estate easier. It can often lead to complications on death and leaves you vulnerable to losing control or access to the assets during your lifetime.
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The information in this article is necessarily of a general nature. The law stated is correct at the date (stated above) this article was first posted to our website. Specific advice should be sought for specific situations. If you have any queries or need any legal advice please feel free to contact Wrigleys Solicitors.