Inter vivos is Latin for "between living persons" so that an inter vivos gift is one given during the lifetime of the donor. An inter vivos gift is one given when the donor is still alive. Inter vivos gifts (including estate property) are not subject to probate taxes since they are not part of the donor's estate at death. However, gifts that exceed $14,000 per year are subject to income taxes if they are made to someone other than a spouse or qualified charity. The actual value of the gifted property is calculated at the time of the transfer.
Inter vivos gifts are an attractive estate planning tool because they avoid probate taxes. However, a potential donor should be aware that such gifts are not revocable. An attempt to exert control over gifted property or derive a benefit from it may result in disallowing the tax-exempt nature of the gift, thus endangering the legal status of the transfer and making it susceptible to tax.
In estate planning, many people choose to give inter vivos gifts to their beneficiaries because it allows the donor to be able to watch the gift in their lifetime. Instead of giving the gifts through a will or a trust, this type of arrangement allows the grantor or donor of the gift to oversee the process of distributing their estate while they are alive. Many people like the idea of this arrangement because it gives them total control of the entire process and distribution.
Other advantages of using inter vivos gifts include:
For a valid inter vivos transfer all of the follow must happen:
An inter vivos gift is not revocable and is not taxable, therefore consultation with an estate planning attorney is recommended to insure adequate evidence of each of the elements noted above. An experienced attorney can walk you through all the steps needed for a valid inter vivos gifting, and ensure your rights and obligations are fully explained.
Last Modified: 04-27-2016 09:32 AM PDTLaw Library Disclaimer
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