A person wishing to gift certain items or real estate to his or her closest family members and friends does not have to wait until death to make these gifts through a will or trust. It is possible to make these gifts as inter vivos gifts. However, this does not eliminate the possibility of legal challenges to the gifts later on after the death of the person giving the gift.
Inter vivos gifts are simply gifts that are made during the lifetime of a person, as opposed to a testamentary gift that is made by will or trust when a person dies. The choice to make an inter vivos gift is up to the particular person making the gift, preferably after consultation with an experienced estate attorney as to the possible consequences of making the gift in this manner.
Generally, gifts are valid if the person making the gift intends to transfer title for free; there is an actual or constructive delivery of the gift, unless it is already in the receiver’s possession; and the person receiving the gift accepts it. Once an inter vivos gift is made, it is unconditional and irrevocable, and the person making the gift loses the ability to take it back. The gift has to be fully made during the lifetime of the person making the gift in order for it to be a valid inter vivos gift.
This means that once the gift is made, the person making the gift no longer has access to that property, and even if he has a major disagreement with the beneficiary of the gift, he can no longer take back the gift in retaliation. Inter vivos gifts should not be made of property that a person may need or rely on for future needs.
Even gifts that are made inter vivos can be challenged after a person’s death. In some cases, a potential heir may try to sue to invalidate an inter vivos gift while the person who gave the gift is still alive. The challenges are often similar to those made to the validity of a will, and usually involve allegations that the person making the gift lacked the capacity to make the gift, or the person was under undue influence when he or she made the gift.
If a person chooses to make an inter vivos gift, it is important that he or she documents the intent in making the gift if it is meant to serve as the receiver’s inheritance. For instance, if a parent who has two children makes substantial inter vivos gift to one child, intending that to serve as his or her inheritance, the parent should document this intention that the gift serve as that child’s inheritance to avoid challenges when that child later receives no testamentary gifts.
Contact an Experienced Estate Planning Attorney
If you are considering making an inter vivos gift, you should consult an experienced estate planning attorneys in Bloomfield Hills and Detroit, Michigan, for more information on how this may affect your overall estate plan. To get started and to discuss your overall estate planning needs, contact Resnick Law, P.C. for a consultation.
(image curtesy of Lina Trochez)