Benefits Of Making A Living Donation

donation

Benefits Of Making A Living Donation

What is better to make a living donation of my assets or leave them an inheritance? This question, which many of us ask at some point in our lives, does not have a definitive answer. Although inheritance is still the most used option, being the least expensive, it is not always the most convenient. Depending on the case, it will be better to donate or leave in inheritance. Through this article, we present 8 benefits of living donation.

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What Is A Donation?

A donation is an act of liberality whereby a person freely disposes of one thing in favour of another, which accepts it. The donation does not obligate the donor, nor does it have an effect, but upon acceptance (Article 629 of the Civil Code). That is, the acceptance of the donor will be necessary for the donation to produce its effects.

In short, it is a “gift”. With it, you will make the person who receives it happy and you will also get personal satisfaction. However, given the belief that this “gift” is free, you should know that it is taxed with various taxes. It is a “gift” that costs money, both to the one who gives the donor and to the one who receives, the donor:

The donor of any goodwill has to face the payment of the Inheritance and Donations Tax. However, this tax is assigned to the Autonomous Communities. In each Community its regulation is different. In some of them, important reductions or bonuses are established.
Only in case of receiving an urban property as a donation, the grantee will have to pay the “municipal capital gain”.

The donor must declare the donation in his Income Statement, except in the case of habitual residence and the person is over 65 years old or that the donation is money.
We will stop in the analysis of these taxes in a separate article to delve deeper into the subject. However, the donation in life has a series of benefits that we detail in this article.

What Are The Benefits Of Making A Living Donation?

1. Help loved ones if necessary

Today the economic situation of many people is going through very delicate and difficult moments, especially youth. The children are living in unfortunate circumstances that prevent them from becoming independent and living their own lives.

In an inheritance, you have to wait for death so that the children receive the goods that you will transmit. The donation can be made at the desired time, fulfilling the relevant requirements. In this way, we can solve the economic troubles of our heirs during our lives. This is the most frequent reason why donations are made in life.

For example, the donation of a father to a son of a flat so that he has his own house or of land where to build his house or, even, of money.

2. Avoid discussions when distributing your assets

It is very common that discussions and problems arise between the heirs after the death of a person. If you are clear about how to distribute the goods, it is advisable to donate them in life, not wait for death, and see your loved ones enjoy life.

3. Impose to the donor a term or a condition

The donor may submit the donation to the fulfilment of a term or a condition, provided that the requirements established by law are met.

It talks about: Term or term when the donation is submitted to a future and safe event (for example, coming of age). The condition when the event is future and uncertain (for example, getting married or studying a certain career). In this case, the donation exists, but its effectiveness is subject to compliance with the circumstances required by the term or condition.

4. Reserve the right to dispose of the donated

The donor can reserve the right to dispose of some of the donated goods or some amount charged to them. You cannot reserve the right to dispose of all the donated goods, only one of them. If the donor dies without making use of this right, the donor will become the full, free and definitive holder of the donation.

In no case, the donor, who no longer owns, can recover the property of the donated, can only dispose of in favour of a third party. Consequently, the donor may alter the donation because it was established by donating and was accepted by the donor.

A good example would be the father who donates a farm and a house to a child, the farm can be reserved to dispose of it, at any time. Always to transmit it to a third party, never to recover the property.

As long as the father does not use this faculty, the son will fully enjoy the farm. The father died without making use of that reserve, the son acquires full ownership of the farm.

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