How JustAnswer Works:
  • Ask an Expert
    Experts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional Answer
    Via email, text message, or notification as you wait on our site.
    Ask follow up questions if you need to.
  • 100% Satisfaction Guarantee
    Rate the answer you receive.
Ask LegalGems Your Own Question
LegalGems
LegalGems, Attorney
Category: Estate Law
Satisfied Customers: 9352
Experience:  Private Practice; Elder Law Attorney; Estate Planning; Attorney Mentor
63726236
Type Your Estate Law Question Here...
LegalGems is online now
A new question is answered every 9 seconds

I have a question regarding money from an inheritance that I

Customer Question

Hi. I have a question regarding money from an inheritance that I declined at the time of my mother's death. Is there a way for my brother to be able to give me the money without him exceeding the gift amount per year or me having to pay any kind of taxes on it? It was money that was passed through a trust. thanks for your help
Submitted: 1 year ago.
Category: Estate Law
Expert:  P. Simmons replied 1 year ago.

Hello! My name is ***** ***** I am a licensed attorney with more than 18 years of experience. I am here to assist you with your questions. Please understand that if I ask you for additional information, you are NOT charged again and our communications are NOT timed. So please see this as a relaxed conversation between friends. I am here to help

Also, if you would like to chat on the phone, let me know and I can make that happen.

There is a way to avoid the gift tax.

Your brother can create a trust and pass the money to you in trust...that would avoid the tax.

Please let me know if you have more questions. I am happy to help if I can. Otherwise, please rate the answer so I may get credit for my work.

Customer: replied 1 year ago.
He currently has a family trust. Would he have to create an additional trust in my name to pass my money back to me? Or could he just put the money in my name.?? Would I have access to it untaxed once placed back into my name ??? Not sure that i understand the process.
Expert:  P. Simmons replied 1 year ago.

Yes. He would...if the goal is to avoid the gift tax, he will need to make a trust (have a local attorney assist with this, since you need one to create a trust), then when the trust is created, he can place the money in trust.

This will avoid the tax

Please let me know if you have more questions. I am happy to help if I can. Otherwise, please rate the answer so I may get credit for my work.

Customer: replied 1 year ago.
also, would the distribution count toward his maximum lifetime of distribution? I think that is his main concern that it will be counted as part of his amount gifted out
Expert:  P. Simmons replied 1 year ago.

You avoid that with a trust...that is why you create the trust...

Customer: replied 1 year ago.
I guess I didn't make myself clear. The amount is about 150K which would be counted against the maximum amount he can gift out. I dont think he wants the amount to count against his maximum lifetime. I guess i need to have a discussion with him. Thank you for trying to help.
Expert:  LegalGems replied 1 year ago.

Thank you for your question. New professional here trying to assist.

So while the IRS has a $14,000 annual limit on gift giving, taxes are not paid until one reaches 5.43 million in lifetime gifts. However, if one gifts over the annual limit they need to fiel form 709

that information can be found here:

https://www.irs.gov/pub/irs-pdf/i709.pdf

Think of it as an accounting sytem for the federal government.

Once the lifetime threshhold is met, taxes will need to be paid.

Expert:  LegalGems replied 1 year ago.

I'm sorry- I apologize for the typoe

#file form 709

Expert:  LegalGems replied 1 year ago.

That form and instructions are here: https://www.irs.gov/pub/irs-pdf/i709.pdf

Customer: replied 1 year ago.
Thanks. I will have to ask him if he is concerned that it will put him short on the 5.43M limit of lifetime gifts. Who will care once he is gone?? I will get in touch and see if we can't work something out. The 150K to him is like a quarter to me, so we are on different financial planets.
Expert:  LegalGems replied 1 year ago.

You are welcome. If this information is helpful please don't forget to rate my answer positively!

If the gifting limit is exceeded, the giftor (not the recipient) is responsible for the gift tax.

I hope you are able to work something out, especially if the inheritance was originally declined since it basically reinstates the wishes of the decedent. I hope this information has been helpful! (if so, please dont forget to rate positively so my customer satisfaction scores remain high).

Thank you and take care!

Related Estate Law Questions