What is a Lifetime Transfer Strategy?

Are you seeking ways to manage and protect your family’s wealth and assets? A lifetime transfer strategy is an invaluable tool that allows for the planned process of transferring your assets throughout your life instead of upon your death.

What is involved in this comprehensive approach, and how is it crucial for preserving generational wealth?

What Can Be Transferred?

Lifetime transfers are a method of transferring and distributing assets to your designated beneficiaries during your lifetime rather than leaving them as part of an estate after death.

Assets that can be transferred during one’s lifetime typically include tangible items such as real estate, cars, jewelry, and furniture and intangible items such as stocks, bonds and company shares. Additionally, lifetime transfers can also involve the transferring of intellectual property, such as patents, trademarks, and copyrights.

What Are The Advantages and Disadvantages?

The primary advantage of a lifetime transfer is that it allows you to distribute your assets as desired during your lifetime, allowing you to control who will receive them and when. This helps to ensure that your estate planning goals are achieved in the most efficient way possible. Transferring assets during your lifetime often allows for more flexibility than a traditional estate plan.

On the other hand, there can be some drawbacks associated with a lifetime transfer strategy. One of the main drawbacks is that it may involve complex legal documents, which can be challenging to navigate without proper guidance. Additionally, applicable taxes or fees may vary depending on the value or type of assets being transferred. 

It should also be noted that transferring assets during one’s lifetime often means relinquishing control over them and, therefore, can limit your ability to change your estate plan if you choose to do so at a later date. 

Is There a Limit on the Amount You Can Transfer?

Generally speaking, there are no limits on the amount of assets you can transfer during your lifetime. But, any transfers over a specific monetary value may be subject to taxes.

As of 2023, you can transfer up to $12.92 million during your lifetime without incurring a gift tax. However, you can gift any individual $17,000 annually without incurring taxes or affecting the lifetime exception.

Can You Do a Lifetime Transfer Into a Trust?

When doing a lifetime transfer into a trust, it’s essential to understand the different types of trusts available and how they work. Revocable trusts allow the grantor (the person who creates the trust) to make changes or revoke the trust at any time. Irrevocable trusts cannot be changed once they have been created. 

Is a Lifetime Transfer Strategy Right For You?

A good lifetime transfer strategy maximizes the benefits of transferring assets during life while minimizing future tax liabilities and ensuring adequate provision for dependants and other beneficiaries over time. 

Because of the legal requirements and various regulations, it is essential to seek professional advice before proceeding with a transfer. Our attorneys at Lonich Patton Ehrlich Policastri have the expertise you need to create an estate plan that meets your specific needs. Call us today at 408-553-0801 or fill out our online form here to schedule a free 30-minute consultation. By making strategic decisions now rather than later, you can ensure peace of mind knowing that all matters relating to inheritance will be handled smoothly both during and after one’s lifetime.

Disclaimer: this article does not constitute a guarantee, warranty, or prediction regarding the outcome of your legal matter.