Episode description
Episode description
In this conversation, estate planning attorney Ted Gudorf discusses the complexities of transferring property to children, particularly the pitfalls of gifting a home versus using a trust. He explains how gifting can lead to significant tax liabilities, such as capital gains taxes, and the complications of gift taxes.
Gudorf advocates for the use of trusts as a more efficient and beneficial method for property transfer, highlighting their advantages in avoiding probate, providing tax benefits, and allowing for greater control over inheritance. The discussion emphasizes the importance of evaluating family needs and goals when deciding between these two options.
Takeaways
- Gifting a home can lead to unexpected tax liabilities.
- Capital gains taxes can significantly impact your children's inheritance.
- A trust provides a step-up in basis for inherited property.
- Using a trust can help avoid probate and its associated costs.
- Trusts allow for greater control over property distribution.
- Gifting may seem simple but can complicate financial planning.
- Trusts can protect assets from creditors and legal issues.
- Setting up a trust is an investment in your family's future.
- Evaluate your family's unique circumstances before deciding.
- Trusts are beneficial for families at any asset level.
Resources: