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Author: WandaJLA Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 75383  
Subject: Possible Divorce/Shelter Invest. Date: 6/23/1999 4:02 PM
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I hope someone might be able to help me here. Wasn't sure where to post....

Here's the facts:

1. Facing possible divorce

2. Been stay at home mom for 12 years, non working(other than 3 kiddos)

3. No assets to speak of other than the $3000 I had invested on my own.

4. I'd probablly have to split that investment, but at 39 and no retirement saved, I'm concerned about having $ for the future.

5. Can I give my sister cash as I accumulae, have her invest it in her name, and when the time is right, gift it to me in stock? or is there a better way?

6. If nothing happens, I'd still have the benefit of my investments over the years. I don't not want to be in the market!

Any input would be appreciated!
Regards,
Wandajla

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Author: WilliamLipp Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 11485 of 75383
Subject: Re: Possible Divorce/Shelter Invest. Date: 6/23/1999 4:52 PM
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WandaJLA Date: 6/23/99 4:02 PM Number: 11483
5. Can I give my sister cash as I accumulae, have her invest it in her name, and when the time is right, gift it to me in stock? or is there a better way?

I think the Tax Strategies Board is you best bet for a reliable answer. There are some moral issues about the appropriateness of your actions, but I'm not going there.

I think this works as long as no more than $10,000 goes either way in any one year, and to the extent you can trust your sister. To make it work, you need to really give it to her, which means she is under no legal obligation to give it back to you. If you exceed $10,000 in a year, or your sister exceeds $10,000 in a year at the return time, you start to affect estate tazes at your (or your sister's) death.

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Author: Bobbcat Two stars, 250 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 11491 of 75383
Subject: Re: Possible Divorce/Shelter Invest. Date: 6/23/1999 7:31 PM
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Prior post reply:
If you exceed $10,000 in a year, or your sister exceeds $10,000 in a year at the return time, you start to affect estate tazes at your (or your sister's) death.

I fairly certain (90%) that if you exceed $10,000 in a year, then you (the person giving the money) will owe gift taxes that year. Same rules apply to her, when she returns the money to you.


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Author: WilliamLipp Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 11493 of 75383
Subject: Re: Possible Divorce/Shelter Invest. Date: 6/23/1999 8:07 PM
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Bobbcat Date: 6/23/99 7:31 PM Number: 11491
I fairly certain (90%) that if you exceed $10,000 in a year, then you (the person giving the money) will owe gift taxes that year. Same rules apply to her, when she returns the money to you.

It's really a topic for the Tax Strategies Board. I know that under some circumstances it first reduces the estate tax exemption at your death, and only results in gitt taxes when that has been exhausted. But perhaps that doesn't apply in all circumstances - TMFTaxes would know for sure and may even have it in the FAQs.

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Author: JABoa Big gold star, 5000 posts Feste Award Nominee! Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 11494 of 75383
Subject: Re: Possible Divorce/Shelter Invest. Date: 6/23/1999 10:43 PM
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I guess I'll be a wet blanket here. If I am reading the messages correctly, the amount of money being talked about is a few thousand dollars. Like less than $30,000, even in anticipation. That money will go real quick for someone who has children who are headed for college. Whatever shenanigans you might want to pull are not going to affect the bigger picture. (No offense intended.) The University of California, a public university, is $10,000 a year when you count it all up, that's the truth.

It seems to me, a bachelor, is that what you really want is an honest divorce settlement with child care provisions that are well spelled out.

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Author: jocave One star, 50 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 11502 of 75383
Subject: Re: Possible Divorce/Shelter Invest. Date: 6/24/1999 10:01 AM
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<<<<<
5. Can I give my sister cash as I accumulae, have her invest it in her name, and when the time is right, gift it to me in stock? or is there a better way?
>>>>>

Three reasons to avoid this-

1. The IRS can use 20/20 hindsight to unroll transactions that violate the spirit of the law. If you "gift" your sister money and she later "gifts" it back to you, the IRS can invalidate both transactions and get most upset with you and your sister.

2. You will be guilty of hiding assets in your divorce settlement. I'm no lawyer, but I'll bet that very unfortunate things happen if ex-hubby points out this deception in the future. Since you were the stay at home mom whil he, presumably, was working, it seems like you've got the most to lose by this tactic. A cranky family court judge could presumably reduce or eliminate alimony, child support, etc. based on this deception.

3. No matter how much you may dislike this person you're married to, the two of you have 3 kids. Playing games will only make the divorce more difficult and more messy. Those kids love you both and will continue to love you both after all is said and done. You owe it to them to be civil to each other before, during, and after the divorce. Hiding money does not create an atmosphere of civility.

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Author: dfrank11 Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 11548 of 75383
Subject: Re: Possible Divorce/Shelter Invest. Date: 6/28/1999 10:50 AM
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THE FOLLOWING IS NOT TO BE CONSTRUED AS LEGAL ADVICE.
PLEASE DO NOT RELY ON THE FOLLOWING AS FACT AND CONSULT YOUR ATTORNEY!

Another issue which you should consider is whether it is necessary to "shelter" the money at all.

Is the source of the funds to which you refer marital or non-marital (i.e., proceeds from an inheritance, sale of a non-marital assets which has been kept separate and distinct from marital funds) money ? In many states, if the money is considered non-marital, your husband would not be entitled to it anyway (and you would not be entitled to any portion of his non-marital assets).

Being unfamiliar with your financial situation, I can only recommend that you consult with an attorney prior to disposing or concealing any assets. Even after talking to an attorney, you may have nothing to gain by such concealment and, instead, will be hurt when attempting to obtain maintenance (child support would probably not be affected).

In any event, think about how you would react to your husband concealing his assets in order to defraud you and the court (not trying to be rude, just think that you should weigh all considerations).

dfrank11

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