Mom gives 16-yr old son three houses for his birthday - Boyce Watkins, PhD

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Duration: 28:39 Views: 3.3K Submitted: 1 year ago Submitted by:

Description: Today, we are going to talk about a story about a mother who gave her son three houses for his 16th birthday. There are nuances about this that are important to understand, so I speaking about them today on my podcast, which you can also find on Spotify. Giving property to children before the age of 18 can have both advantages and disadvantages. Here's a list of the pros and cons: Pros: Tax Benefits: Transferring property to children can result in potential tax advantages, such as reduced estate taxes or gift taxes, depending on the jurisdiction. Asset Protection: By transferring property to children, it can be shielded from potential creditors or legal liabilities of the parents. Wealth Transfer: Early property transfer allows for the gradual transfer of wealth to children, helping them establish a financial foundation. Educational Advancement: Ownership of property can serve as a financial resource for a child's education and future endeavors. Family Legacy: Passing down property early can help preserve and carry on family assets and traditions. Emotional Benefits: Children may feel a sense of responsibility and ownership, promoting financial literacy and maturity. Cons: Control and Decision-Making: The child won't have the legal capacity to make decisions about the property until they reach the age of majority, potentially leading to conflicts or mismanagement. Loss of Control for Parents: Once the property is transferred, parents have limited control over its use or any subsequent decisions made by the child. Financial Risks: If the child is not financially responsible, they may misuse or squander the property, leading to potential financial difficulties in the future. Legal Complexities: Transferring property to minors can involve legal complexities and expenses. Gift Tax Implications: In some regions, early property transfer may trigger gift taxes for the parents. Unforeseen Circumstances: Unexpected events, such as divorce or bankruptcy of the child, could put the property at risk. It's essential to consider these factors carefully and consult with legal and financial experts before making any decisions about giving property to children before they reach the age of 18. Each family's circumstances are unique, and what works for one may not be suitable for another.