Gift Deed or Making a Will: What is the Best Way for Property Transfer?

Estate transfer is more likely a gifting gesture for our future generation. However, people often grapple with the decision of whether to opt for a gift deed or a will. Both methods offer distinct advantages and drawbacks, requiring careful consideration based on individual circumstances.

Transfer of Property by Way of Gift

Gift deeds help in the transfer of self-acquired property to anyone. For that, you have to do some contracting with stamp duty. It will be payable on the property's market value during the deed's execution.

Some states offer stamp duty concessions for gifts to close relatives. However, gifts to non-relatives can trigger the recipient's obligation to include the property's market value in their income for taxation.

Transfer of Property Through a Will

Conversely, making a Will in Singapore enables property transfer posthumously, with the property vesting in beneficiaries after the testator's death. Wills are cost-effective and don't demand any stamp duty or mandatory registration.

Although registration is optional, it's recommended to minimize potential litigation. Inheritance under a will or through succession laws remains exempt from income tax, providing a smooth transition of assets.

Gift vs. Will: Making the Right Choice

Choosing between a gift and a will hinges on personal circumstances. If the aim is posthumous asset transfer with continued control during one's lifetime, a will is advisable. This ensures a seamless succession process.

On the other hand, gifts are suitable for immediate assistance, but they should only be executed when specific circumstances demand it. Transferring assets solely for tax planning or significant portions of assets to heirs may prove imprudent, jeopardizing one's financial security in later years.

Conclusion

The decision between a gift deed and a will is nuanced and depends on individual needs and objectives. Whether prioritizing immediate assistance, seamless succession, or tax planning, careful consideration and, when necessary, consultation with legal and financial experts are crucial. 

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