There are various ways you can pass down your properties to other people in Tennessee. One such way is bequeathing. If you have been pondering the best ways to hand over your assets to your loved ones, here’s one method that can be useful to you.
Bequests in estate planning
In the estate planning process, bequeathing someone is giving them a gift such as cash, stocks, a house, bonds, and securities, as part of your will or trust. The limit to the value of a gift you can give to one individual as of 2021 is $11.7 million and $12.06 million for 2022. This means that you can give a loved one any amount up to $11.7 million, and they will not pay any taxes for it.
Some people also use Crummey power in their estate plan to turn something that isn’t eligible for gift tax exclusion into a gift. To do this, you must stipulate that a certain amount of money that a beneficiary is set to receive annually is a gift. This amount cannot exceed $15,000 or $16,000 as of 2022.
How bequests work
You will make your bequests while creating your will or trust. Among the assets you are leaving behind, you must detail the different types of bequest you are giving to each person. And as things continue to change throughout your life, you must keep these gifts up to date to avoid legal complications in the future.
Then before your heir receives the gift, the court must validate that bequest through the probate court. This process simply checks if it meets all the criteria of a gift.
The executor of your estate plan will oversee the distribution of property to your heirs or friends. If your beneficiaries don’t agree with how they work, they can challenge their decision in court through probate litigation. Therefore, it is important for you to choose someone competent and loyal to you and your loved ones.