Conover & Grebe, llp

Call For A Personal Consultation with an Attorney Today

Is that gift really an advance on an inheritance?

For estate planning purposes, it is important to keep track of the loans and financial gifts that you give to your children while you're still alive. Do they count as an advance on that child's inheritance or not?

Maybe you have three children, for example. Two of them do very well financially and need nothing from you. The third struggles to make ends meet. When that child wants to buy a home, you give them $50,000 so that they can have a down payment and cover the other related costs. The child promises to pay you back, but you do not set up monthly payments or make any other solid plans.

If you pass away and leave equal amounts of money to all three children, will the other two feel slighted? Technically, they ended up with a smaller portion of your wealth. To avoid this, do you want to count the $50,000 as an advance? You can then give that child $50,000 less as part of your estate plan, evening things out and keeping the peace between the kids.

Experts warn that your will and/or trust should specify exactly what you want. If it does not mention the loan or the gift at all, it does not count as an advance, but you can put into the document that an unpaid loan should count against the inheritance. This way, the child can pay back as much as possible while you're alive -- perhaps even the whole loan -- and then the estate plan simply makes up the difference.

As you can see, these situations often get complicated. Be sure you understand exactly what steps to take.

No Comments

Leave a comment
Comment Information
Email Us For A Response

Get Started

Bold labels are required.

Contact Information

The use of the Internet or this form for communication with the firm or any individual member of the firm does not establish an attorney-client relationship. Confidential or time-sensitive information should not be sent through this form.


Privacy Policy

Office Location

3424 W. Carson Street
Suite 320
Torrance, CA 90503

Toll Free: 866-661-9751
Phone: 310-776-9028
Fax: 310-542-1588
Torrance Law Office Map

Anaheim Hills Office
155 N. Riverview Dr., Ste. 207
Anaheim Hills, CA 92808

Toll Free: 866-661-9751
Phone: 310-776-9028
Anaheim Hills Law Office Map