Property transfers before death have advantages. They can avoid probate and its costs, as well as reduce federal income and estate taxes. You can make outright tax-free gifts of up to $10,000 (ten thousand dollars) per year, per donor. No tax is levied on gifts of educational tuition or medical expenses. You can also give property to someone and retain a life estate, essentially allowing you the use of the property until you die, without retaining the ownership. You may also want to consider purchasing life insurance and then transferring the policy ownership to your child. Another idea is to sell your property to your children. You can also loan money to your children and then forgive the debt, but the loan must be in writing. Other possibilities are gifts in the form of trusts, the transfer of company stock to your children, and even employing your children in the family business. Gifts to charity are another way of transferring your property and gaining income tax, gift tax, and estate tax deductions. Charitable annuities allow you to give property to a favorite charity in return for a lifelong annuity. Charitable remainder trusts and pooled income funds give income back to you for making charitable contributions.
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