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Last week's column about gifting money to adult children generated more than the usual amount of reader interest. It also prompted several people to contact me with questions.

That tells me two things: First, there are a lot of Canadians with money they want to give away; and second, I need to do a followup column.

Jamie Golombek, managing director, tax and estate planning, with CIBC Wealth Advisory Services, has agreed to return for an encore performance.

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Your questions, and his answers, have been edited for brevity and clarity.

Can a parent gift shares to an adult child, or must it always be cash?

Parents can give anything they want to an adult child. They can give cash, shares, real estate, or other property. However, if you give property that has appreciated in value it's considered to be a disposition and you would have to pay capital gains tax. For example, if you bought Apple shares years ago and you want to make a gift to your children of those shares you are considered to have disposed of them at fair market value and you would have to pay capital gains tax even though you transferred the shares in-kind to your child's brokerage account. So my advice is, if you want to give anything, the best type of gift is cash because there is no tax liability whatsoever for the giver of the cash and the recipient of the cash. If your intention is to dispose of the shares anyway, or if you do not have the cash, then you can make a gift of the shares or you could sell them first and give the cash. But why trigger a tax event if you don't have to?

Something else to consider: If you're going to make any type of charitable donation, you could give the appreciated shares to charity. Then you could avoid the capital gains tax liability and receive a donation receipt for the fair value of the shares, which will give you a non-refundable tax credit that, in Ontario for example, is worth up to 46 per cent of the donation.

You mentioned that the United States, unlike Canada, has a gift tax. What are the implications of a Canadian parent gifting money to an adult child who is a U.S. resident and/or citizen?

There are no implications, except that there is a form (IRS Form 3520) that would have to be filed by the U.S. recipient if the foreign gift is over $100,000 (U.S.). But the child would still receive the gift tax-free. The U.S. gift tax would only apply when the Canadian parent makes a gift of U.S. "situs" assets, which are typically only U.S. real estate or tangible personal property such as a boat located in the U.S. For gift-tax purposes, U.S. shares are not considered to be U.S. situs assets.

One of my kids lives in Berlin. Is there any difference in the rules if I gift money to him? He is a Canadian citizen.

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I put this question to Max Riederer von Paar, a Washington-based lawyer with Rubin Winston Diercks Harris & Cooke LLP, who is also licensed in Germany.

Germany does have a gift tax, which ranges from 7 to 30 per cent depending on the circumstances. However, there is an exemption of €400,000 (about $563,200) "to ease the tax burden in these cases." Be sure to speak to a German tax specialist.

I want to help my child and his spouse buy a first home but I'm concerned about what will happen if they divorce. Any advice?

One of the strategies that we often recommend is that, instead of making a gift of cash, the parents can take back a zero interest mortgage on the property. Ultimately they could forgive the loan but this is a way to protect the parents' money.

In the case of a marriage breakdown the parents could call the loan and it would be paid off with the proceeds of the property sale.

Is it legally required to put a will in probate? My mother has made all her bank accounts joint with me, and I'm the executor. May I just administer the will without having to go through the trouble and expense of probate?

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Probate protects the executor and people dealing with the executor, like the financial institution holding the accounts or the purchaser of real property from the executor. The practical consideration is that if there are any assets that aren't in joint names, like real estate or a financial account, the land probably can't be transferred or the financial institution may not release the money to the executor or beneficiaries without a probated will. If everything is put into joint name and there are no other assets, then the chances are that no one may ask for a probated will. But there are still lots of disputes about joint assets. I suggest people speak to a lawyer about it.

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