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Jack R.
Jack R., Attorney
Category: Legal
Satisfied Customers: 6147
Experience:  OH/TX Practicing Attorney focusing on Family Law, Foreclosure, Landlord-Tenant Issues.
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My son, who is 18, just received a cashiers check for $35,000

Customer Question

My son, who is 18, just received a cashier's check for $35,000 made out to both of us by his Grandfather. My son is currently enrolled in a Jr. College and is receiving a form of financial aide (Governor's fee waiver) due to my low income. I want him to save this money (already burning a hole in his pocket) in some form of account (CD, IRA, etc.) but I'm not sure which one to choose and whose name it should go under. This is his money so if it goes under my name and I have to pay tax consequences or lose financial aid for his education I would need to dip into the money to cover that. What do you suggest? What types of accounts (and amounts) can I put the money into with the least cost for our current situation? Also if he were to spend some of the money now on college, how much can he spend with the least tax impact on him/me.

Thanks in advance.
Submitted: 1 year ago.
Category: Legal
Expert:  Jack R. replied 1 year ago.

Normally a person receiving a gift will not pay taxes on the money received. Your grandfather may not be so lucky. The best alternative to potentially save your grandfather some taxes is to split the gift in 2. For 2012 the amount that could be give as a gift tax free was $13,000 per person. To save your grandfather some money. The check should be allocated $22,000 to your son, and $13,000 to you. That way only $9,000 of the amount can be considered above the limit.

 

Spending is not an issue as the recipient of the gift does not pay taxes on the gift.

 

For more information here is a link to the IRS publication that explains this:

http://www.irs.gov/pub/irs-pdf/p950.pdf

 

 

This communication does not establish an attorney-client relationship.Information provided here is not legal advice. Rather it is simply general information.

 

 

 

 

Customer: replied 1 year ago.


As I stated my son is receiving financial aid by the way of a fee waiver for tuition. Will this gift interfere with his status?

Expert:  Jack R. replied 1 year ago.

If the application for the waiver includes amount of money from all sources that you have obtained then this could impact your waiver for the year the funds are received. To determine if this is the case and you would need to check with the financial aid office.

 

You might consider setting up a trust with yourself as the trustee and your son as the beneficiary. Strictly speaking the money would not be either of yours, the trust would own the money. As trustee you would control how the money is allocated to your son.

 

 

This communication does not establish an attorney-client relationship.Information provided here is not legal advice. Rather it is simply general information.

 

Jack R., Attorney
Category: Legal
Satisfied Customers: 6147
Experience: OH/TX Practicing Attorney focusing on Family Law, Foreclosure, Landlord-Tenant Issues.
Jack R. and 11 other Legal Specialists are ready to help you
Customer: replied 1 year ago.


Hi,


 


I was wondering if it was possible to hire you to set up the trust?

Expert:  Jack R. replied 1 year ago.
What can I do for you ?
Customer: replied 1 year ago.


I was referring to the answer you gave me above. Do you set up trusts and if so, how much do you charge?

Expert:  Jack R. replied 1 year ago.
I am not licensed in California. This site only allows us to provide information. We cannot accept legal work even if licensed. Check with the bar association ion the county you live in. They will be happy to recommend a lawyer to help you.
Customer: replied 1 year ago.

Thank you, I knew it was a long shot, but I liked your knowledge and directness. (My Mother made me ask).

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Expert:  Jack R. replied 1 year ago.
Thank you for allowing me to assist. If you have questions in the future be sure to ask for me. JackR

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Jack R.
Jack R.
1937 Satisfied Customers
OH/TX Practicing Attorney focusing on Family Law, Foreclosure, Landlord-Tenant Issues.