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Any Tax Attorney's here? Have a situation...

Discussion in 'Non-Vegas Chat' started by Mistaspakles, Jun 30, 2020.

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  1. Mistaspakles

    Mistaspakles Low-Roller

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    So my aunt called me and wants to gift me $200k. She does not want to go through an attorney to set up a trust. She is somewhat old school Vietnamese and doesn't want to establish a trust or go through an attorney. From what I've looked up, a person is allowed to gift $15k a year to an individiual with no tax consequense. I have a spouse and two children (3 and 7yrs). Would my aunt be able to gift my children the $15k each in a bank account where my child and I are the holders, then at a later date I transfer the $15k from my "shared" childs account into mine? That would make that $60k/yr, and we would have to do it over a 4 year period to get to the 200k. Would anyone be able to opine, or suggest something different?

    Thanks,
     
  2. rcc4au

    rcc4au Low-Roller

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    Essentially, she can give it to you all at once and apply it to the lifetime unified credit. She would be responsible for any taxes owed on the gift down the road and file IRS form 709. You wouldn’t be liable for any taxes on the gift, but her estate would be liable for them in the end.

    Here’s a bit of info for you...

    https://www.thebalance.com/when-to-file-gift-tax-return-3504960

    I don’t know if I’d go through the hassle of all the different gifts, but I guess you could.

    There may be others here that can give more specifics, but the website above should get you started.
     
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  3. mdee

    mdee VIP Whale

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    Starting in 2020, the lifetime gift tax exemption is $11.58 million. This means that you can give up to $11.58 million in gifts over the
    course of your lifetime without ever having to pay gift tax on it. For married couples, both spouses get the $11.58 million exemption.
     
    December 2021
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  4. ardee

    ardee It's only money.

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    Encourage your aunt to set up a family trust and talk to an attorney. You will get advice here but not what you need to be sure everything is done properly.

    We have dealt with family trust attorneys and it’s worked smoothly from banking to taxes without setbacks or tax issues.
    Consider talking with your accountant too.
     
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  5. vegasvstr

    vegasvstr VIP Whale

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    Not a lawyer, but l wouldn't squirrel money around, that's how you could end up in trouble.
    If you don't need some of the money I'd consider having her put some in college funds (stocks, bonds etc)
    in the kids names to be taken out in 10-15 years.
    Over 15k mostly means an extra tax form to fill out.
    https://turbotax.intuit.com/tax-tips/estates/the-gift-tax/amp/L1sFpFeXV
     
    Last edited: Jun 30, 2020
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  6. 63hearts

    63hearts Low-Roller

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    Have you considered maybe she draw cash and give it to you, surely you could hide a shoebox?
     
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  7. TrewBrew

    TrewBrew I may be right, I may be Crazy.

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    I would go with trying to get her to do the trust. But also thinking you called it a gift, one of the reasons you give someone a gift like that is so that you can see them enjoy it, in a trust more than likely she will not be here to see that. Hopefully a good tax attorney can help you out and keep her from paying a large tax bill.

    enjoy the wonderful gift from your aunt.
     
    MrsBrew said no more Vegas….after this one
  8. Chuck2009x

    Chuck2009x VIP Whale

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    Talk to a lawyer. You are talking about losing way more in taxes than lawyer fees if you screw it up.

    If by "shared account" you mean joint, that won't work. Both owners of a joint account are considered equal owners.

    You could use an UGMA account (Uniform Gifts To Minors) to receive gifts to the children, but in that case the money has to be used for the benefit of the minor.

    Talk to a lawyer. You can probably get a free consultation, the most complicated part is going to be talking your aunt into doing it the right way.
     
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  9. notfromconcentrate

    notfromconcentrate Connoisseur of dive casinos and obnoxious outfits

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    I can't claim any expertise in this area... but it seems the encumbrance regarding using an attorney comes from her personally, and not necessarily you.

    Here's why I say that... it may make sense for you to privately consult with an attorney regarding what makes the most sense from your perspective. As I understand it, only you (and possibly your spouse/children) could possibly face tax consequences if something went wrong here. So perhaps think of retaining an attorney as a way of protecting yourself, as opposed to acting as a facilitator of the gift itself, if that makes any sense.

    She doesn't even have to know that you consulted an attorney. You could do it in secret and get all of the guidance that you need regarding how to go about it in a way that makes the most sense for you... and use that as your roadmap.

    This is what I would do personally. Between what you can find on the Internet, and the collective wisdom of folks here, you'll probably get very good insights. But without knowing how to apply those insights to your situation specifically, those insights only do so much.

    That's exactly the difference between "information" and "advice"... and this is a situation that I believe calls for the latter.
     
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  10. FuzzyDiceCraps

    FuzzyDiceCraps VIP Whale

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    I'm an attorney, and although I'm a corporate attorney (in-house) by training, that means I've known a lot of extremely wealthy people and have done a fair amount of tax and estate planning work for them as well.

    Trust me, the above posters are absolutely correct when they say "go through an attorney." I cannot stress the importance of this enough. When you're talking about transfers of wealth, particularly cash wealth, it is very easy to make mistakes that can have serious repercussions. If you use the services of an attorney, you avoid these issues, or if you end up with issues you have a professional with malpractice insurance you can pursue for recovery. I understand your aunt doesn't want to go through a trust or use an attorney but it really is the only way to do this worry-free. Not to mention you get the piece of mind of running your goals past a professional who may have alternative (and more effective) ways of accomplishing your goals with less risk.

    Also, I feel as if I should mention the obvious, but this is your aunt's estate plan, and the attorney would be retained to advise her how to accomplish this. Although the majority of the time in these situations one attorney can ethically represent multiple parties because their interests align, it might be a matter where you will want to speak to a separate attorney to look at this from the perspective of your best interests. An attorney who has an understanding of the intricacies of what your aunt wants to accomplish will be able to more easily evaluate the ethical piece of the transaction(s) and determine how interests align.

    Lastly, don't just call your local general practice attorney. This is definitely a transaction that should go through a seasoned, experienced, and proficient estate planner. Find an attorney who specializes in estate planning / wealth transfer. You won't regret it.
     
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  11. Mistaspakles

    Mistaspakles Low-Roller

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    Thanks for the advise all. I'll see if I can setup something with an attorney.
     
    Last edited: Jun 30, 2020
  12. vegasvstr

    vegasvstr VIP Whale

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    In that case get a her a lawyer ASAP!
     
  13. Mistaspakles

    Mistaspakles Low-Roller

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    Thanks all. I'll convince her one way or another to go see an attorney.
     
    Last edited: Jun 30, 2020
  14. Joe

    Joe VIP Whale

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    LOL...my aunt sent me $10 in a card every year for my birthday!!
     
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  15. ardee

    ardee It's only money.

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    I suggest you end this discussion on a publicly accessible message board and get legal advice for you and your aunt in privacy. Sooner than later.
     
    Last edited: Jun 30, 2020
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  16. UKFanatic

    UKFanatic The Arbiter of Taste Caviar Kid

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    Especially in light of the OP's first post. It reminds me of when I used to work at a big frm and I sent one of my well to do clients to one of our tax attorneys for some estate planning. When I saw the other attorney a few days later, I asked him how the meeting went. His response: your client didn't come to me for legal advice; he came for ilegal advice :eek:
     
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  17. Mistaspakles

    Mistaspakles Low-Roller

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    Thanks @UKFanatic :rolleyes: I'm certainly not looking for something illegal...just want to make sure I don't step outside of the space shuttle without a tether. I've convinced my aunt to see an estate planner with me, so thanks to everyone who commented...it made my push to do this a little easier.
     
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  18. ffejry

    ffejry #1 Bears Fan

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    Will your aunt adopt me?
     
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  19. HoyaHeel

    HoyaHeel Grammar Police & Admin

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    One thing I've heard from friends - meeting with an estate atty is great to help with your own affairs, of course- but it also makes it easier to deal with if you have to handle someone else's affairs when they die. First, you (hopefully) have a relationship with a professional you trust, and you already understand some of the terms and processes, even if the estate differs from your own. For various reasons, we didn't use the same attorney as any of our parents, but us having gone through the process made it easier to speak with our parents about their planning. Not wanting to interfere (or, heaven forbid, make assumptions - they earned the money, they should - and are -spending it the way they want while alive!!!) but just to make sure they have met with someone to make the arrangements THEY want. Including power of attorney, medical power of atty etc. All that good stuff. It can be difficult to talk about death with aged parents, but it's critical.

    Good luck mistaspakles! So glad your aunt agreed to go with you.
     
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  20. fudgewapner

    fudgewapner Low-Roller

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    Good move on an attorney. I would imagine the attorney would propose gifts to your kids in the form of 529 plan contributions due to the growth benefits and tax-free withdrawals. At least that route makes sense at first glance, but I'm not getting $350 an hour to offer counsel so what do I know! "When in doubt, get a lawyer" is always prudent!
     
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