How to successfully make a “large” gift to your children or grandchildren

Davidson Estate Law

Davidson Estate Law

Oct 10, 2018

What constitutes a “large” gift can be relative. That being said, if you are considering giving cash or property to someone, a little bit of planning can really help avoid negative consequences.  This is particularly true if the gifted amounts are over $15,000.00, will be gifted in property, will be gifted on a regular basis, or if the gift givers — whether parents or grandparents — hold assets that are over $11 million.

Options for Making “Large” Financial Gifts:

There are several options you have available to you and your family should you want to provide a large financial gift to your children or grandchildren.

  • UGMA/UTMA accounts. The Uniform Gifts to Minors Act (UGMA) and the Uniform Transfers to Minors Act (UTMA) are two ways you can transfer assets to a minor while still having them managed by a custodian. Most states across the country have established these acts, which allows for the management of the assets without creating a special trust. While the accounts are similar in many ways, the types of assets you can transfer to them differ. UTMA allows virtually any type of asset to be transferred to a minor while the UGMA limits gifts to bank deposits, securities, and insurance policies.
  • Trusts. A legal agreement instructing someone of your choosing to manage and distribute the assets you leave to your children. Trusts provide many options depending on your family’s circumstances. Control of the assets you leave behind can be then handed over to your children with full access at a time you have pre-determined. Some types of trusts include special needs trusts, health and education trusts, and pot trusts (for a group of minors), and beneficiary controlled trusts.
  • 529 accounts. This is a tax-advantaged savings plan that is designed to save money for future qualified education expenses of a minor.
  • Direct payments. You may choose to pay a third party directly on behalf of your minor children or grandchildren. For example, you may pay medical expenses or school tuition directly to the medical or educational institution rather than giving the money to a child.

As can be seen, there are several options to consider when deciding how to make a gift.

Ask an Estate Planning Attorney:

If you are able to articulate the goals and hopes you have in mind for your children’s or grandchildren’s financial legacy, a skilled estate plan attorney can advise you on the best way to make these a reality. Consider consulting with a lawyer to understand your options when making a large financial gift – however you define that amount – to your loved ones.

Yelp Reviews

Davidson Estate Law 5.0 star rating 8 reviews
Niles L.'s Review Niles L.
5.0 star rating

Recently completed our trust and were so happy and impressed with Davidson Estate Law. We have recommended them now to other friends.

My wife and I just...

Read More »
Craig H.'s Review Craig H.
5.0 star rating

Steve, Joelle and Eric have been a pleasure to work with! True professionals with a family oriented outlook that really made us feel confident and...

Read More »
Sabine P.'s Review Sabine P.
5.0 star rating

My tax accountant highly recommended me to hire Steven for taking care of my living trust and I will do it again in a heart beat!
He is very professional...

Read More »

CONTACT INFORMATION

1300 Clay Street, Suite 600

Oakland, CA 94612

(510) 527-6774

OFFICE LOCATIONS

Oakland City Center Office

1300 Clay Street, Suite 600

Oakland, CA 94612

San Francisco Office

201 Spear Street, Suite 1100

San Francisco, CA 94105

Berkeley Office

2081 Center Street

Berkeley, CA 94704

Walnut Creek Office

1990 North California Blvd, 8th Floor

Walnut Creek, CA 94596

San Mateo Office

1900 South Norfolk, Suite 350

San Mateo, CA 94403

San Jose Office

111 North Market Street, Suite 300

San Jose, CA 95113

FOLLOW US

© 2019 Davidson Estate Law. All rights reserved. Sitemap | Digital Marketing by: MediaSmack