A Few Rules for Asset Transfers – Consider This…

April 23, 2015
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handingdownTransferring your assets, whether to another person, an organization or a legal trust, should be straightforward and simple. In reality, though, moving your money or property can trigger a gantlet of taxes and legal requirements. But while the process can seem daunting, asset transfers remain a critical tool for planning your financial future and deploying your wealth in the way you see fit.

At HFG Wealth Management, we make it a point to stay abreast of the most effective asset-transfer strategies. And in tandem with our trusted legal partners, we help our clients to move their assets with a minimal difficulty.

Common Reasons for Asset Transfers
Asset transfers occur for any number of reasons. Some are initiated as a result of a major life event, while others take place as part of a strategy to help strengthen your financial position or to protect your wealth from taxation and lawsuits. Asset transfers can take place when one:

  • Marries, and wishes to share property with a new spouse.
  • Establishes a trust, then retitles the property or assets and transfers them into the trust.
  • Acts to reduce estate taxes by removing assets from an estate.
  • Moves to protect assets against potential lawsuits.
  • Gifts securities or other property to an individual or to charity.

Tax and Legal Barriers
As we mentioned, asset transfers may have thorny tax and legal consequences. The gift tax is only one example. Gifting assets to family members can be an effective way to mitigate income or estate taxes. However, in 2015, any gift to an individual that exceeds $14,000 for the year ($28,000 for joint gifts by married couples) applies against the lifetime gift tax exclusion. It also requires the filing of IRS Form 709 for the year in which the gift was made.

Asset-Transfer Solutions
There are many more such examples. The good news; however, is that there are also a wide range of transfer strategies. In almost every situation, choosing the right one can help to minimize taxes and legal hurdles. A few examples that have worked well for our clients include:

  • Annual gifting. Each year, remove assets from your estate by giving cash or property equal to that year’s gift tax exclusion to each child, grandchild, or any prospective heir.
  • Transferring assets to parents. Those supporting elderly parents in low tax brackets may wish to transfer assets those parents, who would pay taxes on those assets at their lower rate.
  • Writing checks directly to educational institutions. Grandparents paying for their grandchildren’s education should mitigate taxes by paying the school directly.

Experts to Guide You
Finally, trusts and other advanced strategies can serve as powerful tools to allow you to protect and preserve your wealth. The HFG team and our trusted legal partners can help to identify and execute the best strategies for your specific situation and goals. It would be nice to be able to give and receive wealth without having to think twice. Smart asset-transfer strategies are the next best thing.

At HFG Wealth Management, we embrace a more holistic method of financial planning known as Financial Life Planning™. We believe this is a financially effective and personally rewarding approach to creating a practical, lasting financial plan. As financial professionals using the life planning approach, our purpose is to assist individuals and families in creating a long-term vision that is consistent with their core values. At HFG we recognize that life events and life transitions can impact your financial responsibilities and your vision of the future. We are here to provide you with tips and strategies to get you started and help you reach your financial and life goals at every stage. For more information, please visit www.hfgwm.com or call 832.585.0110

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Copyright © 2017. HFG Wealth Management, LLC. Investment advisory services offered through HFG Wealth Management, LLC – An independent Registered Investment Advisory firm registered with the SEC. Investing involves risk including the potential loss of principal. No investment strategy can guarantee a profit or protect against loss in periods of declining values. Therefore, any information presented here should only be relied upon when coordinated with individual professional advice. [ more disclosures ]