Gift causa mortis (Latin for “gift given on account of death”) is a legal concept involving a transfer of property that is intended to take effect only upon the death of the grantor. It is a type of advance inheritance, where the property is transferred before the death of the individual and does not become effective until it has occurred. This type of gift allows a person to plan ahead and transfer property without interference from creditors or other parties.
Examples of Gifts Causa Mortis
One example of a gift causa mortis is a will or trust. These instruments make it possible for the deceased to transfer the ownership of their property and assets to loved ones when they pass away. Another example is a life insurance policy, where the death benefit paid out is a gift causa mortis. These policies are often bought by individuals who want to provide some financial security for their families after they are gone. Lastly, a power of attorney document can be a form of gift causa mortisas it allows an individual to designate another person to make financial or medical decisions on their behalf in the event of their death.
The Benefits of Gift Causa Mortis
One of the main advantages of gift causa mortis is that it allows the grantor to plan ahead for their future without worrying about their assets being seized by creditors. It also eliminates the possibility of any future disputes over the ownership or division of property and ensures that the designated parties get the items that the grantor intended them to have. Furthermore, since it is generally revocable, it allows the grantor to change or cancel the transfer if they choose. The transfer of a gift causa mortis also has the same gift and inheritance tax consequences as any other gift.