immateriality quincentenary: Gifting to Family Members

Gifting to Family Members

Yesterday, 10:40 AM

? #1

Recycles dryer sheets

Join Date: Jun 2010

Location: Seatlle

Posts: 157

Gifting to Family Members

I am thinking about Gifting some $$ (up to the $13K max) to Family members, on the theory that it is probably needed now by them more than later when I'm gone, plus it will reduce the estate taxes.

I have a small family & unfortunately never had children, so it would be for my brother, niece & nephew.

My concerns or thoughts are:

1. how will it affect our relationship & how to keep it as neutral as possible.
2. should the $$ have any strings attached or not?

Since they are down to earth playful folk, I had thought maybe asking them what they plan to do with the $$ and see what actually happens.
My DH feels it should be more "no strings" although I certainly would not hold anyones feet to the flame so to speak.

Any thoughts/experiences on this?

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Yesterday, 12:06 PM

? #7

Full time employment: Posting here.

Join Date: Aug 2004

Location: St. Louis

Posts: 985

A suggestion:

Don't give them the max of $13k, since they might think "oh, if Aunt Landlady is giving us the max this year, there's a good chance there'll be more of this coming down the pike", and might artificially influence their behavior (either good or encourage them to be even more wasteful with the money).

Give them $10k each, no strings attached. See what they do with it. Then ask yourself if you will feel comfortable giving them more money, based on how they used it.

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Yesterday, 01:19 PM

? #12

Full time employment: Posting here.

Join Date: Jul 2012

Location: Illinois and Florida

Posts: 868

Not applicable to the OP situation, but a word about the law and any situation that might involve some government benefits such as medicaid.

In most states, there is a 5 year lookback period, where certain expenditures within that period would be considered as assets prior to receiving aid. ie. Nursing Homes.

In other words, an elderly parent may not "give away" assets, in order to receive government benefits.

Example: An elderly person with $100,000 in assets who chose to give it away in order to fall under the Medicaid limit, and thus have nursing home care paid for by the "state"... would be ineligible if the "gift" was made within the 5 year limit.

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Yesterday, 03:00 PM

? #18

Recycles dryer sheets

Join Date: Nov 2012

Location: Dallas

Posts: 346

They are playful folks, eh? Engage each in a conversation "What would you do if you won $10,000 tax free on a scratch-off ticket? " Then hand each an envelope with a scratch off ticket and a check in it.

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Yesterday, 03:15 PM

? #19

Recycles dryer sheets

Join Date: Jun 2010

Location: Seatlle

Posts: 157

Wow! Thanks for all the good ideas & thoughts...No strings it is!

And I also was not thinking of starting with the full amount as a starting point.

I don't think a nice vacation beyond their usual ones would be the best use of the funds - they are northwesterners & climb mountains, bike the pacific coast & ski/snowshoe, etc.

But niece & neph are adults & I can see maybe getting their fist home, or buying something they need/want could be on the agenda.

The reason I keep my brother & his wife in the group is because they both work very hard & I don't believe they have retirement savings of significance & their house could use a few repairs. There are other issues I won't mention here - but they are good thrifty peeps that have hit a few bad bumps in the road over time and it could give them a little relief.

Anyhoo....I am planning to go visit them (out of state) in the next few weeks, so I will test the waters & see how they feel about it.