Giving Inherited Money

1mo

Call them and ask them how they will like to receive the money. Please send it certified and need a signature if by mail….

1mo

Thank you. Calling is probably best although I want to keep things calm. One of the uncles can be hard to reach by phone too.

CapnGramma

1mo

Check into their situation, too. A large lump sum might play havoc with a benefit they receive or change their tax situation. In that case, it might be better to set up an annuity or trust to disburse the funds and interest over time.

FinancialDocument115

1mo

I agree. Ask first.

1mo

Thanks.

-3

1mo

I can’t speak for every country in the world but I’d be shocked that you’d be liable for anything in any of them when receiving a gift.

The giver pays.

And if they’re in a bad situation money wise this will only help.

mittentigger

1mo

Not the case. For example if they are on Medicaid. A gift of 10k would cause huge issues, they can’t have more than 2k in the bank. there are creative ways to structure things so that they don’t run afoul of medicaid rules

User deleted comment

1mo

Sad_Construction_668

1mo

You’re not listening. For instance, I have a home health aide benefit. I am disabled and no state Medicaid. If I receive $10k in cash, I would lose my Medicaid and home health aide benefit. I would have to reapply after I spent that money (about 60 days at current oop costs for my treatments) and would have to re-apply for Medicaid and the home health benefit, which would cause a significant delay in my care.

So, 10k cash would materially harm me, and make my life more difficult.

It wouldn’t go back to Medicaid, the savings to the taxpayer is negligible, no providers gain any money, and my home health aide would have to do another job search (for which they don’t get paid).

This is the reality of the American disability system. It’s dumb, and shouldn’t work that way, but it does.

For OP, if you have someone in this situation, disabled and needing to maintain eligibility for Services, you can create a special needs trust, for them, so they can benefit from the money, but in a somewhat restricted way. Talk to an estate lawyer about it.

1mo

This is really helpful thank you.

Ok_Cantaloupe7602

1mo

Yup. Neighbor lost her Medicare because she inherited money from her mother.

1mo

A special needs trust for $10k. Sure; after they’ve paid $1500 to set it up and 3% a year to the corporate trustee to administer it.

Great “planning”. This sub is full of people with impractical advice

Sad_Construction_668

1mo

Which would be cheaper and better than losing the money and Medicaid.

1mo

“Cheaper” is accepting $9,999 in cash and using it for everyday expenses. This place might as well be r/estateplanningtheory as there is nothing of practical use being discussed.

Sad_Construction_668

1mo

Are you slow? The asset limit is $2000. The risk for handling $9k in cash and getting caught is permanent loss of benefits. Why would you promote Medicaid and benefits fraud on a public forum?

1mo

Buy them a Louis Vuitton bag. My god I’ve never seen so many obstacles to giving somebody a gift.

Continue thread...

Lemonlimecat

-1

1mo

If someone is on Medicaid they are likely not itemizing their deductions on their tax return.

And it is not a 1 for 1 reduction in taxes—

If someone is in a 30% tax bracket and they donate $10,000 then that is an itemized deduction on income which saves $3,000 in taxes.

PriorSecurity9784

1mo

I don’t think I’d send a cashiers check without talking to them. If it gets lost in the mail, and you never talk to them, then you’re both out the money.

A regular check, if uncashed, stays in your account

1mo

Thank you, great point.

troy2000me

1mo

I agree, only reason for a cashier's check is either when the the receiving party doesn't want to trust the other party that they have the cash in their account to make the check "good"... or if you don't trust this family with your routing and account number.

I think discussing it with them and mailing a personal check would be fine.

1mo

Thanks for your input!

Intelligent_Cry7626

1mo

If they are low income and receiving medicaid or some other government benefits, this money could affect their benefits.

1mo

This is a really valuable comment to me and I will take it into consideration before doing anything. Thank you

FinancialDocument115

1mo

True

Ok-Structure6795

1mo

Before you give away anything, make sure a final accounting is done and you've paid inheritance taxes (if applicable). You don't wanna give away money then find out the estate owes money.

1mo

Thank you.

scout336

1mo

Instead of giving your relatives a monetary windfall that could jeopardize their finances, perhaps consider calling them and asking them HOW you can help them (e.g., pay rent for 6 months, purchase new furniture, pay outstanding bills, etc.) .

1mo

Thank you for your thoughtful response.

Capital-Bromo

1mo

Ask them how they want to receive it. Best case scenario you can use Venmo or Zelle, and be done with it virtually.

11093PlusDays

1mo

Where I live if someone dies without a will an executor must be appointed and the estate distributed according to the law in that particular state. I would be careful to follow the law for distribution rules where she died.

1mo

I was the only named beneficiary on all her accounts. She didn't own property. Thanks

11093PlusDays

1mo

Then my understanding is that it belongs to you and is outside of probate. You can do what you want with it. You sound very kind and caring about less fortunate family members.

1mo

Thank you. I'd like to try to follow through on something I think she'd have wanted.

Las1970

1mo

You may need to do a wire transfer to each recipient. I'm pretty sure in Australia, for example, that you are not able to deposit a check written on a foreign bank account, even if it's a cashier's check.

Edited to correct typo

No_Sentence6221

1mo

The amount of gift tax exclusion is $18,000 in 2024. So if the amount you intend on giving them is under $18K, it can be excluded from taxable income for them

1mo

A gift of money to the beneficiary is always excluded from bene income….

No_Sentence6221

1mo

Read the post again, the siblings are not beneficiaries.

1mo

A gift of money to anyone is excluded from income…

1mo

Thank you.

User deleted comment

1mo

Dandylion71888

1mo

Out IN the country not out OF the country

Youknowme911

1mo

There is a rule that they can spend down the money in the same month they receive it. I helped a lady do this by purchasing a Pre Need funeral/ cemetery trust and the rest went to pay her Assisted Living Facility. She had to do it that month and did not lose her benefits .

1mo

If you ended up getting everything, make sure you figure out your tax situation first. Since she didn’t have a trust, you will get taxed. This is one of those times that if you did taxes yourself, you may want to hire a decent tax accountant this year.

Also, what others said, check with the other family members first, but if you pay all your taxes first, you can gift a little over $15k to someone else without additional taxes. Anyway, a good tax accountant should be able to give you advice on the best way to approach this situation. Please though figure out what you are liable first on taxes before sending money to others.

HiReturns

1mo

You say the amounts are less than $10,000. I would simply gift that amount to them, as it is be,ow the amount that requires reporting the gift via a gift tax return.

The simplest from your point of view is to just write out a check and mail it. You are not asking for a release or anything like that, so there is not even a need for certified mail.

You obviously should include a letter explaining the reason for the gift.

Even if the other siblings are much better off, do not be surprised if you get some requests for money from them.

1mo

If below annual gift limit, there is no gift tax return to be filed unless above the lifetime gift limit

1mo

Thank you