As you establish your estate plan, one of your goals may be to provide certain gifts to your family members and friends. While there are some tax benefits to doing this while you are still alive, you may also pass on “testamentary gifts” through your will. Doing so can help your beneficiaries avoid many of the headaches associated with probate.
There are three different categories of testamentary gifts that a Farmington Hills estate planning attorney can help you arrange in your will. The following is a brief overview of each:
- Specific gift: A specific gift is explicit about which assets or property go to which beneficiaries. You might, for example, specify that a loved one receives a certain collection or a specific piece of furniture you own. You may also use specific gifts to forgive debts others owe to you.
- General gift: A general gift is not as easy to interpret as a specific gift, which is why individuals usually try to be as specific as possible when creating their wills. An example would be leaving behind “a motor vehicle” for a loved one. If you have more than one vehicle, that instruction might be too vague. Your executor may need to interpret and analyze the will to determine the likely intent behind a general gift.
- Residuary gift: This is a gift of property left over after the executor has administered the rest of the assets and property. For example, after your loved ones receive all of the specific gifts outlined in your will, the rest of your property goes to a specific person or organization.
How should you leave behind these gifts?
You should discuss with your Rochester Hills estate planning lawyer exactly what gifts you want to leave behind to your beneficiaries, along with the strategies you will use to leave those gifts.
There are a few ways you can leave gifts, including:
- Making gifts in an exact amount: If you are leaving behind money, you may specify an exact amount of cash — whether it’s for general use or a special purpose.
- Designate a percentage of your estate to go to charity: You may choose to leave money or property to a charity or cause of your choice. Typically, you will designate the percentage of your estate’s value that will go to the organization in question.
- Create special types of trusts: Trusts allow you to bypass the probate process and can shield your assets from estate taxes. This can be an important benefit if the value of your estate is hovering around the estate tax exemption limit.
You have the power to decide what will happen to your assets and property after you pass away. Meet with a professional at a Southfield estate planning law firm to guide you through the process.
Schedule Your Free Consultation with Our Experienced Estate Planning Attorney
Einheuser Legal, P.C. is an estate planning law firm in Bingham Farms, Michigan. We help families set up wills and living trusts. Attorney Michael Einheuser is an experienced estate planning lawyer serving residents in Bingham Farms, Troy, Farmington Hills, Rochester Hills, Southfield, West Bloomfield Township and Bloomfield Township.
Schedule your free consultation today by calling (248) 398-4665.