There are some serious drawbacks to many options for giving gifts to grandchildren. Either there are no tax or estate planning advantages, or you have no control of the funds (or lose control after a certain point), or the money could affect a grandchild’s eligibility for financial aid. An option that overcomes many of these problems involves transferring money into a trust established to benefit a grandchild. We can draft a trust that reflects your express wishes about when the income and principal will be available to the grandchild, and even how the funds will be spent. Transferring funds into…
What Is A Trust? A trust is a legal arrangement through which a person (s) (or an institution, such as a bank), called a “trustee,” holds legal title to property for another person, called a “beneficiary.” The rules or instructions under which the trustee operates are set out in the trust instrument. Trusts have one set of beneficiaries during their lives and another set — often their children — who begin to benefit only after the first group has died. The first are often called “life beneficiaries” and the second “remaindermen.” There can be several advantages to establishing a trust,…
Another way to remove assets from an estate is to make a contribution to a charitable gift annuity (CGA). A CGA enables you to transfer cash or marketable securities to a charitable organization or foundation in exchange for an income tax deduction and the organization’s promise to make fixed annual payments to you (and to a second beneficiary, if you choose) for life. A portion of the income will be tax-free. Please visit our website at www.davidwingate.com. Peace of mind is only a call or click away! For an Initial Consultation call Estate and Elder Planning by David Wingate at (301)…
Making Gifts: The $16,000 Rule One simple way you can reduce estate taxes or shelter assets in order to achieve Medicaid eligibility is to give some or all of your estate to your children (or anyone else) during their lives in the form of gifts. Certain rules apply, however. There is no actual limit on how much you may give during your lifetime. But if you give any individual more than$16,000 in 2022, you must file a gift tax return reporting the gift to the IRS. Also, the amount above $16,000 will be counted against a lifetime tax exclusion for…
Congress sets the amount that an individual can transfer tax-free either during life or at death. The current estate tax exemption is so high that very few estates will have to pay an estate tax. In 2017, Republicans in Congress and President Trump doubled the federal estate tax exemption and indexed it for inflation. In 2022, the exemption is $12.06 million ($24.12 million for couples). That means that as long as your estate is valued at under the exemption amount, it will not pay any federal estate taxes. The lifetime gift tax exclusion – the amount you can give away without incurring…
Transferring funds into such a trust offers the following benefits: (1) You can reduce the size of your estate by transferring up to $16,000 (in 2022) into each trust you create for each grandchild. No gift taxes will be due in connection with the transfers; (2) Although the trust owns the assets, you control them as trustee and can decide what type of investments to make; (3) Income earned by the trust from amounts that you’ve deposited will not be taxed to you; the trust pays the taxes; (4) Amounts deposited in trust, and the income earned from those funds,…
There are some serious drawbacks to many options for giving gifts to grandchildren. Either there are no tax or estate planning advantages, or you have no control of the funds (or lose control after a certain point), or the money could affect a grandchild’s eligibility for financial aid. An option that overcomes many of these problems involves transferring money into a trust established to benefit a grandchild. With the help of an attorney, you can draft a trust that reflects your express wishes about when the income and principal will be available to the grandchild, and even how the funds…
A will is a legally-binding statement directing who will receive your property at your death. It also appoints a personal representative to carry out your wishes. However, the will covers only probate property. (Probate is the court process by which a deceased person’s property is passed to his or her heirs and people named in the will.) Many types of property or forms of ownership pass outside of probate. Jointly-owned property, property in trust, life insurance proceeds and property with a named beneficiary, such as IRAs or 401(k) plans, all pass outside of probate Why should you have a will?…
A will is a legally-binding statement directing who will receive your property at your death. It also appoints a personal representative to carry out your wishes. However, the will covers only probate property. (Probate is the court process by which a deceased person’s property is passed to his or her heirs and people named in the will.) Many types of property or forms of ownership pass outside of probate. Jointly-owned property, property in trust, life insurance proceeds and property with a named beneficiary, such as IRAs or 401(k) plans, all pass outside of probate Why should you have a will?…
Planning for Your Golden Years: 5 Things You MUST Know! Webinar on: Wednesday, October 28th, 2020 10:30 am To register call us at 301-663-9230 or Kristin@davidwingate.com For a complete list of upcoming seminars, visit our website at www.davidwingate.com. Peace of mind is only a call or click away! For an Initial Consultation call Estate and Elder Planning by David Wingate at (301) 663-9230 or visit www.davidwingate.com David Wingate is an estate planning and elder law attorney at Estate and Elder Planning by David Wingate. The Estate and Elder Planning office services clients with powers of attorneys, living wills,…
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