Is Early Gifting an Inheritance a Good Idea?
Written by Anita Saulite
Friday, April 13th, 2018
Sharing your wealth with the people you love and supporting causes you care about can feel like a truly rewarding thing. Gifting your assets is both philanthropic and very personal.
Most of us leave a legacy for our children, grandchildren or community through a will. Some of us prefer not to wait and opt to "early gift." The benefit to this approach is that you get to see and experience the joy and happiness that came from your gift.
Early Gifting Can be Done in Many Different Ways
Giving money requires planning and professional advice, because you don't know how long you're going to live. Retirement could be one of the longest phases in your life.
Gifts can be non-monetary in nature, such as family heirlooms, mementos, or artwork. Some people gift artwork to galleries or museums for everyone to enjoy. Others simply give the gift of time and volunteer in the community.
Early Gifting from a Personal Perspective
Early gifting is also good for the soul. Your emotional wellbeing takes a boost because giving to others makes you feel good. I have a friend whose grandmother contributes financially to her grandchildren's university education. The amounts are not large, but are given frequently.
My parents decided to early gift our entire family by taking us on a family vacation. It's often very difficult to get all of us in the same room. The time we spent together brought us closer together and is something I'll forever cherish. We took the time to share stories and the trip created lasting memories for all of us.
Bill Gates, who spent decades building the Microsoft empire, now distributes much of his wealth to fight disease, improve education, and help people in need through the Bill & Melinda Gates Foundation.
Some pre-plan their funerals, which could be considered a future gift to family members.
If you're interested in early gifting, here are 5 helpful tips to get you started:
1. Make a plan. List all the important people in your life, and think about how you might early gift each.
2. Consider a non-monetary gift. Particularly one with sentimental value. Perhaps a piece of jewelry or artwork. You could pass on your grandmother's ring to your granddaughter, or a painting to your son that he has always admired.
3. Balance financial gifts with your lifestyle and retirement needs. It's one thing to downsize your home so that you can help your kids or grand-kids purchase their first home. Just make sure you don't run out of money for your retirement. Be clear on your financial situation.
4. Gift slowly. Giving away your inheritance doesn't have to be an all-or-nothing event. You might choose to just give a little bit here and there.
5. Engage an estate lawyer and get expert tax advice. The laws are different in each province in Canada. You'll need to talk to a professional about your plan.
Ultimately, early gifting can be a way to enrich the lives of your family, friends or community, as well as leave a lasting legacy.