by 3 hours ago
ANSWERS: 5
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First, money passed by gift (even during life) or by will is not income to your children for their federal income tax purposes. So all you need to consider is the federal gift & estate tax consequences. The federal estate tax provides for an exemption (which is currently one-million, but will rise steadily to 3.5 million over the next 6 years). Unless you have been subject to the gift tax in the past, if your estate is less than the exemption amount, then no federal estate taxes should be due. If your estate is over the exemption amount, then you have plenty of money to hire a good lawyer for estate planning. :)
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In a Living Trust, in as many broken down single increments of no more than $9,999. per increment. Each person can have as many increments of $1.00 under $10,000. without having to file a Federal report, which by Law, any bank is required to report, if the SINGLE transaction is more than $9,999. The TOTAL SUM can not exceed $1,000,000. in a single lifetime per person.
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There are no estate taxes in a living trust when it is a gift up to $1,000,000. dollars per lifetime when given to a persons children.
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GO TO YOUR BANK AND SET- UP A TRUST FUND FOR EACH OF THEM. NOTHING TO IT, BUT YOU'LL HAVE TO DECIDE WHICH ONE WILL BE THE ADMINISTRATOR OF THE TRUST. ASK YOUR BANKER, HE'LL KNOW.
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The most tax-efficient way to pass money to children is through Life Insurance. Not only is it tax-free, but the money passes outside of probate. If issued correctly, the proceeds can be completely excluded from the deceased's estate. Many people overlook insurance, usually because they don't understand it. Many think they are too old to buy insurance, but most insurers issue policies to age 80 - some even higher. The controlling issue is your health. But that doesn't mean you have to have perfect health. Even 80-year-olds can get Preferred (or better) ratings; this simply means they have better than average health for their age. For individuals who have a lump sum of money they want to make sure passes to someone, a single pay life policy is often the very best, safest, least complicated way to do it. Tax Free. Get a referral from a friend or trusted advisor to a reputable life insurance company or representative and investigate for yourself. It costs nothing to apply!
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