But what if you decide to treat the amount as a gift. If you have more than one child, it is very important to understand and document how you want to address this gift. If the other siblings discover a gift was made to one of them but not all of them, it could create some resentment or fighting after both of the parents have passed away.
When making a gift to a child, you need to decide if this is an outright gift with no bearing on future inheritance, or rather, do you want the gift to be considered an "advance" of future inheritance. In this case, the gifted amount would be deducted from that child's share of their inheritance at the time they are to receive their inheritance.
So in simple terms, if you chose to treat the amount given as a "gift", you will need to do one of the following (depending on your wishes):
1) Intend to provide disproportionate amounts to your children through gift and inheritance
2) Gift equalizing amounts to all siblings (be sure to understand any tax implication of your gifting)
3) Consider the gift an advance on inheritance.
Whichever option you choose, you should be sure to document, document, document - either with an update to your will and/or trust, in other writing, or through documented action. If you don't, there will most likely be a a great deal of fighting and frustration among your children after you have passed away.
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