Should I Gift Money to My Children Now or Later

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Your financial legacy is a reward for a lifetime of hard work and financial success. Many affluent Canadians want to give their children money, but aren’t sure about whether to make a living gift or leave money in their estate. This leads to the question: Should I give my children money now or later?

One of the benefits of making gifts during your lifetime is that you can help your children with important milestones like the purchase of a house, car, or a college education. You also get to enjoy seeing the impact your gift has on the life of your loved ones.

There are also some practical advantages to living gifts. If you are concerned about your children’s financial skills, you can guide and assist how your money is spent. On the other hand, if you’re worried about running out of money during your lifetime, you may be better off leaving your children an inheritance.

It’s also important to understand any tax implications of giving cash or assets to your children, in case you wish to do so from your portfolio.

If you’re concerned about how your children may spend your money after you’re gone, you can set up a trust in order to control how the money is invested and disbursed to them. If structured properly, trusts don’t ever need to be handed over to the control of the beneficiaries.

Trusts are a great way to help ensure that your wishes are followed after your death, but I often caution my clients against trying to exert too much control from beyond the grave. Life is full of unforeseen events and you don’t want your children to suffer financially because of decisions you made long before.

Ultimately, the decision about whether to leave your children money now or later depends entirely on your financial and family circumstances. If you want to enjoy seeing your hard work benefit your children, then gifts during your lifetime make sense. If you’d rather keep your money until you no longer need it, leaving money in your estate may be a smarter option. One of the benefits of working with a financial advisor is that we can help you design a plan to meet your current financial needs while leaving an enduring legacy for tomorrow. Sincerely, Andrew & Peter

#estateplanning

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