The decision to gift your property to family members is a generous one, and you probably have the best of intentions. However, have you considered the possible negative events that could happen as a result of your gift? Transferring your valuable assets to an irresponsible family member could damage the value of your estate and negate all the hard work you put into purchasing the property. This is why you should always engage the services of a conveyance lawyer before gifting property to family members.
A conveyance lawyer or estate lawyer can help determine whether gifting property to the family member of your choice is a good idea. In many cases, they will help you consider factors you may have overlooked and work through tough questions. Your case must be evaluated on an individual basis for the best advice, but generally four factors to consider when gifting property are listed below.
Capital Gain Taxes
Gifted property is still subject to capital gain taxes. What if the capital gain taxes are too much for the receiver of your property and the gift becomes a burden? It may be a better idea to put the property in your will, so they can inherit it upon your death, or to sell it the property to them as opposed to gifting it to them.
This may sound counter intuitive, as the whole point was to gift them property free of charge, but capital gain taxes mean that the gift will never be entirely free. It may make more financial sense to just sell the property to family members instead. A conveyance lawyer will advise you on the proper way to proceed.
Partnership Agreements Between Family Members
Do you want to gift one property to several family members? Perhaps you have a house that you want to gift to two of your children. They will have to enter into a partnership agreement or some problems may arise. What if one or both get married? What if one child needs to sell the property while the other wants to hold on to it?
Before gifting the property, you should discuss the particulars with your lawyer. You may also want to keep the property in the family and don’t want inheritors to be able to sell it. A conveyance lawyer can walk you through the particulars.
Vices of Family Members
This is a difficult topic to broach, and you may be tempted to overlook the vices of your family members. However, when it comes to your property, you want to make sure that it’s gifted to good hands. Does your intended family member have any vices that would put the property at risk, like alcoholism or gambling?
In some cases, family members may not have troublesome vices now but they could develop further down the road. A conveyance lawyer will help you determine the best course of action when it comes to gifting property to family members.
The Relationships of Your Family Members
This may seem like an unusual factor to consider. After all, you just want to gift property to your family member…what do their relationship have anything to do with your gift? Well, if you gift property to your daughter and she is married, that property becomes part of your son-in-law’s estate, too. If they were to get divorced, what happens to the property you gifted? The relationships of your family members should always be considered before you gift property.
These are just four factors to consider when gifting property to family members in Australia. There are many other factors particular to your estate and your family that a conveyance lawyer can help you consider. Don’t rush into gifting property before you have engaged the services of a conveyance lawyer.