Father wants to gift me money

[Anonymous]

Anonymous wrote:He needs to give you maximum gift amount every year. Easy.

Correct.

[Anonymous]

Anonymous wrote:

Anonymous wrote:Smd the point is to hide assets from Medicaid?

That's what it sounds like! Sounds like dad is getting ready for the five-year lookback.

Very wise of him. So few people plan for it and trust their kids enough.

My MIL (who will never be on Medicaid) trusts her kids entirely with her money. My husband has access to all her accounts and manages everything for her.

No one else I know, including my own parents, have such clear-sightedness about their own decline, and such trust in their kids. My parents are a slow train wreck: they’re declining cognitively and physically and won’t accept any help at all.

[Anonymous]

Anonymous wrote:

Anonymous wrote:Do you all know you will have to pay taxes on anything over the $19,000 allowed to be gifted tax free? If you have a spouse, he can give you both double for a total of $38K.

If you go over those amounts, your dad will have to report it to the IRS and possibly someone will need to pay tax on it. It would be a waste of money if you were to gift the money back to him and have to pay tax a second time. I've never heard of someone keeping the money in case the parent needed it.

This is wrong. The excess over the yearly exclusion amount will be applied to your father's lifetime estate tax exclusion. If his estate is smaller than that very large amount, then the excess gift won't increase anybody's tax liability.

+1. No matter how many times this is repeated somehow people still think they owe gift tax for the amount over 19k/38k.

[Anonymous]

Anonymous wrote:Smd the point is to hide assets from Medicaid?

Yes, apparently. And it’s sad that peoole have to do this

[Anonymous]

Anonymous wrote:There is a Medicaid look back period (5 years, maybe?) and he is 78...

I guess maybe he assumes he will need a nursing home but why anyone would choose a Medicaid home who has assets I can't figure out.

It’s a lot more complicated than looking back 5 years. A nursing home will go through a million pretty quickly so it depends on how much he has.

The only advice anyone should be given is to see an elder law attorney.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Do you all know you will have to pay taxes on anything over the $19,000 allowed to be gifted tax free? If you have a spouse, he can give you both double for a total of $38K.

If you go over those amounts, your dad will have to report it to the IRS and possibly someone will need to pay tax on it. It would be a waste of money if you were to gift the money back to him and have to pay tax a second time. I've never heard of someone keeping the money in case the parent needed it.

This is wrong. The excess over the yearly exclusion amount will be applied to your father's lifetime estate tax exclusion. If his estate is smaller than that very large amount, then the excess gift won't increase anybody's tax liability.

+1. No matter how many times this is repeated somehow people still think they owe gift tax for the amount over 19k/38k.

The lifetime exemption is about $30 million for a couple. My in-laws retired so early they had 35 years of gifting children and grandchildren and when they passed close together about 5 years ago my fil estate still owed gift tax and estate tax. And they planned very well. I wouldn’t try to do anything on my own. A specialist can end up saving you a lot of money.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Do you all know you will have to pay taxes on anything over the $19,000 allowed to be gifted tax free? If you have a spouse, he can give you both double for a total of $38K.

If you go over those amounts, your dad will have to report it to the IRS and possibly someone will need to pay tax on it. It would be a waste of money if you were to gift the money back to him and have to pay tax a second time. I've never heard of someone keeping the money in case the parent needed it.

This is wrong. The excess over the yearly exclusion amount will be applied to your father's lifetime estate tax exclusion. If his estate is smaller than that very large amount, then the excess gift won't increase anybody's tax liability.

+1. No matter how many times this is repeated somehow people still think they owe gift tax for the amount over 19k/38k.

The lifetime exemption is about $30 million for a couple. My in-laws retired so early they had 35 years of gifting children and grandchildren and when they passed close together about 5 years ago my fil estate still owed gift tax and estate tax. And they planned very well. I wouldn’t try to do anything on my own. A specialist can end up saving you a lot of money.

All that money and you still can’t write clearly.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Do you all know you will have to pay taxes on anything over the $19,000 allowed to be gifted tax free? If you have a spouse, he can give you both double for a total of $38K.

If you go over those amounts, your dad will have to report it to the IRS and possibly someone will need to pay tax on it. It would be a waste of money if you were to gift the money back to him and have to pay tax a second time. I've never heard of someone keeping the money in case the parent needed it.

This is wrong. The excess over the yearly exclusion amount will be applied to your father's lifetime estate tax exclusion. If his estate is smaller than that very large amount, then the excess gift won't increase anybody's tax liability.

+1. No matter how many times this is repeated somehow people still think they owe gift tax for the amount over 19k/38k.

But it's true if he goes over he has to report it to the IRS and it does go against the estate lifetime limit. And yes most won't hit that, but some of us are legitimately concerned about it

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Do you all know you will have to pay taxes on anything over the $19,000 allowed to be gifted tax free? If you have a spouse, he can give you both double for a total of $38K.

If you go over those amounts, your dad will have to report it to the IRS and possibly someone will need to pay tax on it. It would be a waste of money if you were to gift the money back to him and have to pay tax a second time. I've never heard of someone keeping the money in case the parent needed it.

This is wrong. The excess over the yearly exclusion amount will be applied to your father's lifetime estate tax exclusion. If his estate is smaller than that very large amount, then the excess gift won't increase anybody's tax liability.

+1. No matter how many times this is repeated somehow people still think they owe gift tax for the amount over 19k/38k.

The lifetime exemption is about $30 million for a couple. My in-laws retired so early they had 35 years of gifting children and grandchildren and when they passed close together about 5 years ago my fil estate still owed gift tax and estate tax. And they planned very well. I wouldn’t try to do anything on my own. A specialist can end up saving you a lot of money.

This 1000%. if you are UHNW or upper end of HWN, it can affect you. So plan accordingly.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:wtf? That’s such a dumb idea. Either it’s a gift or it’s theirs, they are making this too complicated. I’d refuse the gift if there’s going to be these strings. Maybe you can set them up with a financial advisor who can help direct them how to best invest their money? There are lots of options for growth that are relatively stable.

No, I get it. If there’s trust and love, this isn’t an issue.

What’s the actual point though? “Here’s $50k. You can’t spend it bc I might need it later, but you take on all the tax implications and work.”
Ridiculous.

There’s no real tax implications or work for a savings account with $50k in it. I agree that op’s dad should work on formal estate planning, but I can understand that he sees this money that will eventually go to op, so no harm in getting it to him early, and it also could help facilitate cashflow down the road if there are issues in the future. In a family where everyone trusts each other, this isn’t a big deal.

There’s 0 benefit to giving someone else to keep your money in case you need it later unless you’re hiding assets. To scam the government. Despicable. Some people actually NEED those services.

And people want to blame immigrants for taking advantage of the system!

It does make managing money for them a lot easier when they get too old.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Smd the point is to hide assets from Medicaid?

That's what it sounds like! Sounds like dad is getting ready for the five-year lookback.

Very wise of him. So few people plan for it and trust their kids enough.

My MIL (who will never be on Medicaid) trusts her kids entirely with her money. My husband has access to all her accounts and manages everything for her.

No one else I know, including my own parents, have such clear-sightedness about their own decline, and such trust in their kids. My parents are a slow train wreck: they’re declining cognitively and physically and won’t accept any help at all.

I manage my parents' finance since they were in their 80s.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Do you all know you will have to pay taxes on anything over the $19,000 allowed to be gifted tax free? If you have a spouse, he can give you both double for a total of $38K.

If you go over those amounts, your dad will have to report it to the IRS and possibly someone will need to pay tax on it. It would be a waste of money if you were to gift the money back to him and have to pay tax a second time. I've never heard of someone keeping the money in case the parent needed it.

This is wrong. The excess over the yearly exclusion amount will be applied to your father's lifetime estate tax exclusion. If his estate is smaller than that very large amount, then the excess gift won't increase anybody's tax liability.

+1. No matter how many times this is repeated somehow people still think they owe gift tax for the amount over 19k/38k.

The lifetime exemption is about $30 million for a couple. My in-laws retired so early they had 35 years of gifting children and grandchildren and when they passed close together about 5 years ago my fil estate still owed gift tax and estate tax. And they planned very well. I wouldn’t try to do anything on my own. A specialist can end up saving you a lot of money.

All that money and you still can’t write clearly.

lol

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Do you all know you will have to pay taxes on anything over the $19,000 allowed to be gifted tax free? If you have a spouse, he can give you both double for a total of $38K.

If you go over those amounts, your dad will have to report it to the IRS and possibly someone will need to pay tax on it. It would be a waste of money if you were to gift the money back to him and have to pay tax a second time. I've never heard of someone keeping the money in case the parent needed it.

This is wrong. The excess over the yearly exclusion amount will be applied to your father's lifetime estate tax exclusion. If his estate is smaller than that very large amount, then the excess gift won't increase anybody's tax liability.

+1. No matter how many times this is repeated somehow people still think they owe gift tax for the amount over 19k/38k.

The lifetime exemption is about $30 million for a couple. My in-laws retired so early they had 35 years of gifting children and grandchildren and when they passed close together about 5 years ago my fil estate still owed gift tax and estate tax. And they planned very well. I wouldn’t try to do anything on my own. A specialist can end up saving you a lot of money.

All that money and you still can’t write clearly.

I’ll admit I’m a terrible writer. If I read my words back I cringe. I don’t edit things posts like these but I do know how edit my jumbled words.

[Anonymous]

Anonymous wrote:Give. Not gift.

I think "gift" is appropriate here because there's concern about actual ownership, tax implications, etc.

People are generally too loose with "gift," I agree. But then I'm still fighting the fight against "impact" when people mean "affect."

Anyway, OP, maybe your father should meet with a financial planner rather than trying to wing this, because the half-assedness of "It's yours unless I want it back" is not a plan.

[Anonymous]

Anonymous wrote:

Anonymous wrote:But from OP's post, it sounds like the father is worried about something happening to them so the account is really there in case money is needed quickly, not to help OP because they aren't supposed to touch it. I don't think this is scamming, just worry about assets being locked up in case something should happen, maybe?

Easiest would be to do a joint account, but I don't know about the implications of that for OP -- like if they have that account do they have to disclose that for financial aid or something?

But the reason why I said estate planning is that he is 78. Ideally the father should sit down with OP and discuss all their assets, accounts, life insurance, etc. plus share estate planning docs and discuss their wishes. They could set up a POA that could be springing as that would let their child help with ALL their finances/healthcare decisions not just this random account.

If it’s a joint account and the father passes, the bank freezes the account. Happened to us when my dad died. That account was joint with my sister who lived with him and it was where all the automatic payments for household bills came from. It was an issue for us. Like I said upthread, in a trusting family, this isn’t a big deal and can be helpful moving forward. [/quote

No this is not true. Check whether their accounts are survivorship accounts. I had a parent who was ill and passed a few weeks ago so these are things we reviewed this years All accounts have been transferred to surviving parent.