Deciding whether or not to gift something over the course of your life or to pass it on once you are no longer around is an important decision, especially with regard to the federal gift tax. Every person can gift up to $15000 per year free of gift tax. This means that you do not have to file a gift tax return and that no taxes have to be paid on that amount.
Very few Americans will have to worry about the estate tax given the current exemption amount. But passing everything on to one child can be an extreme choice and could have risks that you might not know about.
First of all, this means that one child will own everything, and this was passed on while you were still alive. You as an individual or as a couple could become financially dependent on them for everything that your current income stream does not cover.
If your loved one receives all of your assets but changes their mind about taking care of you, there is nothing you can do about it. Furthermore, if your child goes bankrupt, divorces or dies, the money could also be lost. Consider any potential and capital gains tax implications in making any transfers and decide with the assistance of an experienced and trusted lawyer the most appropriate course of action.
With all that should be considered in passing on assets, turning to a trusted Virginia Beach estate planning law firm helps you pin down all the details and leave behind a thought-out plan for your loved ones.