Prices are higher this year, but there are still ways to budget for a happy holiday.
Inter vivos gift
Inter vivos gift is a legal and financial term it pays to understand. Bankrate explains it.
What is an inter vivos gift?
Inter vivos is Latin for “between the living.” An inter vivos gift is a legal term that refers to a transfer or gift given to someone while both the giver and the receiver are alive. An inter vivos gift is the opposite of a testamentary transfer, which is a gift given after death.
Inter vivos gifts have two main benefits: First, since the gift is given and received before death, it is not considered part of the giver’s estate, and thus would not be subject to probate taxes. Second, if the gift is given to a charitable organization, the giver may get a federal tax credit when it’s time to file a return.
A gift will count as an inter vivos gift if the giver voluntarily intended to give the gift; the gift is gratuitous and the giver did not receive anything in return for it; there is an irrevocable surrender by the giver of dominion and ownership of the gift.
Even an organ donation can be considered an inter vivos gift.
When people are drafting their wills or planning their estates, they may give some of their property as inter vivos gifts because it lets the recipients enjoy the gifts immediately and eliminates the property from the estate, thereby smoothing the process. However, since the gifts are not revocable the giver cannot ever regain ownership or control of the property.
Inter vivos gift example
Carter, a businessman, promises his nephew, Joel, a piece of land if he works hard and passes his exams. Joel lives up to Carter’s expectations and is gifted with the piece of land. Carter goes through all the processes of land transfer and gives Joel his title deed. This type of gift is considered an inter vivos gift.
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