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Author: Jerry41256 Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 121114  
Subject: TMFTaxes on Cash Gift Date: 1/11/1999 9:25 PM
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Roy,
Can you give me some idea of how this could cause problems in the estate area? To be honest they are not working with a tax professional on this.
Thanks
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Author: TMFTaxes Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 8293 of 121114
Subject: Re: TMFTaxes on Cash Gift Date: 1/12/1999 6:24 PM
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[[Can you give me some idea of how this could cause problems in the estate area?
To be honest they are not working with a tax professional on this. ]]

Sorry, Jerry...but I don't remember the specifics of the original post, and I can't seem to find the original post.

So if you could give me the details again, OR the post number of the original post (again, restating your question above), I'll be glad to try to give you an appropriate follow up response.

TMF Taxes
Roy

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Author: Jerry41256 Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 8311 of 121114
Subject: Re: TMFTaxes on Cash Gift Date: 1/12/1999 7:43 PM
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Roy,
Yes, I was the one who had asked about my parents writing me a check for 500k as a sort of lifetime gift when the business we have operated sells. You had said that they may be in a Pickle down the road with estate tax issues. Post #8159 . They are not working with anyone on this. Rather than transfer shares of stock to me we decided some time back this is how I would be compensated when the business sold. Dont really know how it would affect them negatively.
Thanks,
Jerry

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Author: TMFTaxes Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 8319 of 121114
Subject: Re: TMFTaxes on Cash Gift Date: 1/12/1999 8:26 PM
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[[Yes, I was the one who had asked about my parents writing me a check for
500k as a sort of lifetime gift when the business we have operated sells. You had
said that they may be in a Pickle down the road with estate tax issues. Post
#8159 . They are not working with anyone on this. Rather than transfer shares of
stock to me we decided some time back this is how I would be compensated
when the business sold. Dont really know how it would affect them negatively.]]

It may impact them negatively, Jerry, because they can only give so much before they begin to use up all of their unified gift/estate tax credit.

The amount of the unified credit amounts to $625k currently. If they gift you $500k, that means that they'll pay estate taxes on anything that they own in excess of $125k (if they happen to pass away this year...God forbid).

And without the proper tax and estate planning, they could just screw up their entire estate, and pay CONSIDERABLE taxes to Uncle Sammy upon their death (remember that the estate taxes can reach as high as 60% of the net estate assets).

So if you parents are fortunate enough to have a half a million dollars to gift to you, they most likely have considerable other assets. And if that is the case, they could really get in an estate tax pickle.

So they CERTAINLY have enough money to cut lose with a few thousand and visit a qualified estate planner and get the appropriate advice and council for their estate. The attorney can be made aware of the gift that will be coming your way, and can plan for that gift within the entire estate plan. It would CERTAINLY be in their best interest. Believe me.

Good luck...
TMF Taxes
Roy

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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: 8321 of 121114
Subject: Re: TMFTaxes on Cash Gift Date: 1/12/1999 9:28 PM
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Roy, do you have any sense of what fraction of people try to do their estate planning and similar stuff involving complicated tax issues, on the cheap? I don't, and this is maybe a softball question, but I suspect it may be more than there ought to be.

In my own family, a great-uncle of mine died in about 1972. He had a very small estate, but he left small bequests in a will written on a standard form he got from the local stationery store. The bequest to me, and similar ones to some of my cousins, was held up because he did not specify that it should go to JABoa, infant (I was not yet 21). In Ontario at the time minors could not inherit without specific direction. I got it eventually, but this is not what Uncle Bill would have wanted, I am sure.

Settling my grandfather's estate was better, but his will had been written in 1930 or so and had not been revised when he died in 1976.

In both cases, I think they said to themselves, Grrr, I don't want to pay some damn lawyer all that money, and for what? I think the "for what" is making happen what you want to have happen, and the amount you pay is a small fraction of what you have at risk.

(JABoa hastens to add that I am not a lawyer, and I don't even play one on TV.)

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Author: TMFTaxes Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 8346 of 121114
Subject: Re: TMFTaxes on Cash Gift Date: 1/13/1999 7:10 PM
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[[ Roy, do you have any sense of what fraction of people try to do their estate
planning and similar stuff involving complicated tax issues, on the cheap?]]

FAR too many...

[[ I don't,
and this is maybe a softball question, but I suspect it may be more than there
ought to be.]]

Certainly more than there ought to be. It always cracks me up how somebody with a million dollar estate won't cut lose with a few thousand dollars to get the estate put together correctly. It just boggles my mind. And, to tell you the truth, I don't feel all that sorry for 'em...when they KNOW better, but decide to save a buck here and there.

[[ In my own family, a great-uncle of mine died in about 1972. He had a very small
estate, but he left small bequests in a will written on a standard form he got from
the local stationery store. The bequest to me, and similar ones to some of my
cousins, was held up because he did not specify that it should go to JABoa,
infant (I was not yet 21). In Ontario at the time minors could not inherit without
specific direction. I got it eventually, but this is not what Uncle Bill would have
wanted, I am sure.]]

I'm sure that you are right. Part of the problem is that it's not until the person has passed that the beneficiaries have to clean up the mess. And, generally, beneficiaries are already trying to deal with greif and loss...they don't need an attorney or accountant tellying them how much the "dear departed" screwed up, and how much it'll cost to fix it.

[[ In both cases, I think they said to themselves, Grrr, I don't want to pay some
damn lawyer all that money, and for what? I think the "for what" is making
happen what you want to have happen, and the amount you pay is a small
fraction of what you have at risk.]]

In my experience, you are correct about the sentiment. You are also correct about the result. Things are getting better, but not as good as I would like to see them. Education is the key.

TMF Taxes
Roy

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