What is the difference between a lifetime gift and a testamentary gift?

A lifetime gift is a transfer of property or assets from one person to another that takes place during the first person’s lifetime. A testamentary gift is a transfer of property or assets from one person to another that is contemplated by a will or other similar document and only takes effect upon the first person’s death. In Hawaii, lifetime gifts may be given to anyone, whereas testamentary gifts are subject to inheritance laws. Furthermore, lifetime gifts are typically exempt from taxation while testamentary gifts are often subject to estate taxes. In addition, lifetime gifts are not subject to probate court proceedings while testamentary gifts must be verified and approved by the court. The primary difference between lifetime gifts and testamentary gifts is that lifetime gifts occur while the donor is alive and testamentary gifts occur after the donor’s death. Lifetime gifts can be used to provide financial support to a person in need while testamentary gifts are intended to be used to provide financial support to the specified beneficiaries after the donor’s death. Either way, it is important to keep in mind that laws concerning inheritance and lifetime gifts vary from state to state, so make sure to consult with an experienced attorney in order to ensure that you are following the proper procedures when gifting property or assets in Hawaii.

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