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Thomas McJD
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Need a elder law attorney Question Mom lives in New York

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Need a elder law attorney

Question Mom lives in New York State we understand tax implications if her estate is over 1 million she is 83 years old her current assets are 1.5 mil 600k house value 900k in cash what is the best way to reduce her tax burden I know that she can gift up to 14k per person per year I under stand if she gifts more you have to file form 706 with the IRS
if she gifts like 150k to each child in there same year is there a look back period what would be the best way to avoid a look back moving the cash and if we put the kids names under the house is there a look back period also and does she lose are exception on the house
or if she sells the house that she live in and gets her name off the new house is this another way to keep her under the miiion dollar mark

Again what we be the best way to do this ? with no looks back

Mike D
Submitted: 1 year ago.
Category: Legal
Expert:  Thomas McJD replied 1 year ago.

TMcJD :

Hi, I will be happy to assist you, and it is my goal to make you a very satisfied customer! This may take a few minutes, so thanks for your patience.

TMcJD :

There is no look back period for gifting and whether that is then included in the gross estate for estate tax purposes. She could gift enough in a single year to reduce her estate size in order to eliminate or minimize NY estate tax consequences. She has a $5.25 million federal exemption she can use so that after gifting and reporting of the gifts on the federal gift tax return she'll still have plenty of exemption for federal estate taxes. New York doesn't have a gift tax so there's no concern there. Because properly reporting the gifts and using part of her credit is very important, I would advise that you use a CPA familiar with gift tax reporting or an estate/gift tax attorney to assist with filing the proper gift tax return. Yes, you are correct it can be $14,000 per person per year with no gift tax consequences or the need to file the gift tax return. Beyond that the return and use of the unified credit is necessary. The lookback period you may be thinking of is for Medicaid qualification. If she wanted to try and qualify for Medicaid there is a lookback period, but since that doesn't seem like a concern or goal, it's nothing to worry about.

TMcJD :

Please let me know if I can provide additional assistance. If not, I would be grateful if you could please leave me a positive rating. I cannot receive credit for my work without your positive rating and that is the sole means of compensation for JustAnswer experts. Thanks.

Customer:

see we have this greedy stock broker and we are telling him that we want to break the 900k and put have under the kids names He is instucting us to dont touch the money put put the kids names under the house Is this correct there a 5 year look back period for trying to reduce her estate immediaty who is only for medicare issues

Customer:

also what about the house if she sells it and buys new house and puts it under kids names does this help to reduce the tax liablilty and staying under the radar of the one million

TMcJD :

There is a lookback period for Medicaid, not Medicare. If your mother removes her name from the house altogether and puts it only in your name and your siblings' names, and has an agreement with you all for staying in the home for payment of a reasonable rent, then that might work. However, it increases the chance that the transaction is not viewed as a completed gift and then you have estate tax issues. With a transfer of cash, it's clean, easy and it doesn't have the appearance of an incomplete gift.

Customer:

should we put the 450k in a trust for the children so she is still in control then kids receive money after she passes

TMcJD :

Do NOT trust the advise of an investment adviser with regard to planning to estate reduction for estate tax purposes. They really don't know enough to give proper advice. It would be best if your mother spoke with a local estate attorney to ensure no avenues are overlooked and that the best plan is put in place and carried out.

TMcJD :

If she is still in control, it's going to be included in her estate for estate tax purposes. She has to lose all ownership and all control.

TMcJD :

She could still place it in trust with restrictive terms to keep you and her other children from using it in a manner she thinks is not appropriate, but it would need to be an irrevocable trust and she could not be trustee. That is an option she could discuss with a local estate planning attorney.

TMcJD :

Do you require clarification or additional information?

Expert:  Thomas McJD replied 1 year ago.
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Customer: replied 1 year ago.

Thanks for the info !


 

Expert:  Thomas McJD replied 1 year ago.
You're very welcome. Please let me know if I can provide help with anything in the future. have a great day!
Thomas McJD, Attorney
Category: Legal
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