Gifting Assets Inter Vivos
Published on 29 August 2022, 07:22:56 AM
Gift assets to family and loved ones while you’re alive. Let Axess Law draft your basic Will, while you decide on inter vivos gifts.
Testamentary gifts are given upon your death. But inter vivos gifts can be made during your lifetime. They make use of cash and investments you would otherwise put in Wills in Ontario.
Unlike bequests distributed after death, inter vivos gifts go to family members’ immediate needs or charities of your choice. We write your testamentary Wills — whether you need one or many — and you distribute inter vivos gifts.
When to Gift Assets
- You could add precious pets to your last Will and testament. But if a beloved family pet has passed on, making a donation in their name may be the best way to leave money to charity.
- A gift of cash could help your kids start or get through a difficult spot in their business venture.
- Add a child or family member to the title of your home.
- Invest in your children’s future by paying college or university tuition.
- Open joint bank accounts to share wealth with a new spouse.
Three Conditions for Inter Vivos Gifts
Gifts given during your lifetime must be genuine and change hands physically or on paper. Your gift must be:
- Intentional.
- Accepted by your beneficiary.
- Delivered or transferred.
Gifts that were well intentioned but never given can be set aside by a probate court under Wills and estates (Ontario) law. They are returned to your estate to form part of the assets your executor distributes after estate taxes and debts are paid.
Avoid Legal Claims After Death
Consider this: after you die, your estate may come under attack from beneficiaries or others who feel they deserved a larger share of your bequests.
Besides the obvious arguments (you didn’t intend to make the gift), inter vivos gifts can be disputed on four basic grounds.
Mental Capacity
If your Will leaves most of your money to charity because you want to help others, your family may argue you lacked mental capacity before you died. In other words, you didn’t understand the nature and effect of making the gift. Arguing you had dementia and didn’t appreciate your assets would be depleted could sway the court to reverse your decisions.
Resulting Trust
Not being explicit in your Will could create a legal loophole. Wills that leave significant assets, like a family home, to a favourite child may be overturned if siblings can prove a resulting trust was created.
While you may have meant for them to have the house, unless you state that in your Will, the court could conclude a family joint tenant was merely a caretaker. The onus is on the gift receiver to prove you were joint tenants vs tenants in common or probate court could order your home sold and the proceeds shared with siblings.
Undue Influence
Proving you were unduly influenced requires evidence you were actually coerced, fooled, cheated or manipulated into making a gift. Circumstantial evidence can be enough to overturn your Will. Courts may also presume those who had close relationships with you when you were ill, elderly, had dementia or relied on a caretaker for assistance influenced you to make a gift your beneficiaries object to.
Unconscionable Bargain or Procurement
A deal that seems to disadvantage you or was arranged by the person who benefitted from it may be declared unconscionable and set aside. The onus is on potential beneficiaries to show you didn’t mean to make the gift or were fooled into giving away assets.
Declaring Gifts in Ontario Wills
Sharing a lawyer with your spouse or partner but can’t agree on how to proceed? Axess Law gives independent legal advice when conflicts of interest arise. Protect your financial interests by asking us for a legal opinion letter.
Who Pays Taxes on Gifts
Be careful gifting real estate to spouses, biological or adopted children or blood relatives. While it can preserve family homes for everyone’s enjoyment, beneficiaries may wind up paying capital gains taxes when they sell.
Real estate is appraised at fair market value when gifted to family. Property gifted when its value has fallen can gain you tax credits. Family members pay tax if they sell after you die, making timing crucial to avoiding a capital gains burden.
Otherwise, property sales by a spouse or common law partner during your lifetime results in capital gains or losses being attributed to your income taxes. Likewise, if the beneficiary is a minor or spouse, rental income from a gifted property is reported on your taxes.
Axess Law advises you on making gifts of real estate and can refer you to trusted tax professionals to avoid financial mistakes that could cost you dearly.
Flat Rate Legal Services
Our low flat rate fees for simple basic Wills (Ontario only) start at just $199.99. For $249.99 and up, you add a power of attorney for property or personal care at the same time.
More complex estates may require multiple Wills. Our fees start at $600 and up for a primary Will for assets that need probating, such as real estate, and a secondary Will for assets that don’t, like shares in a private corporation.
A lot can change during your lifetime. If you marry, separate or divorce, have or adopt children, we help you draft a new Will, instead of making codicils or amendments that can increase confusion after you pass.
Easy Online Video Appointments
Our lawyers for Wills are available 7 days a week and can meet you in person at any of our open law offices (Greater Toronto Area or Ottawa).or online via video conferencing.
We join you via secure, confidential video call from the comfort of your home or office. Our Wills and estate lawyers have convenient hours to fit any schedule. And when you prefer to meet face to face, we have Wills lawyers near you at the Axess Law office of your choice.
Make online or in person appointments 7 days a week with our online booking form or call our 1-647-479-0118 lawyer line to find a Wills lawyer near you. Toll free calls accepted at 1-877-402-4277.
Axess Law has onsite parking and easy transit access.
