What is the difference between a lifetime gift and a testamentary gift?
In Kansas, a lifetime gift is a transfer of property or money that occurs during the giver’s lifetime, while a testamentary gift is one created by a will and takes effect only upon the giver’s death. A lifetime gift is often used to reduce the size of the giver’s estate for tax-planning purposes, or to provide someone with immediate funds or assets. These gifts are irrevocable once given, and they cannot be taken back. The Kansas statute requires that the donor prove that they transferred the property or money of their own free will and that they are not under any form of duress. Testamentary gifts, however, are those that are made only after the donor has died and are named in the donor’s will or trust instrument. The will or trust instrument must describe the gift in detail and name the intended recipient. Testamentary gifts are revocable up until the time of death and can be changed or removed at any time. In most cases, both types of gifts are subject to taxation in Kansas and must be reported to the Kansas Department of Revenue. The recipient of a lifetime gift will typically only owe taxes on any gains they realize if they sell the property gift, whereas the recipient of a testamentary gift (or the estate of the donor) may be liable for certain taxes or fees.
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