wonder how you would approach this situation....
wife comes from a large family and they have some money...
they screwed up, and have not setup a trust for the kids, etc
parents are in their 80's
So - they are thinking of just gifting $12,000 to everyone :)
BUT - how do you gift to the different size families & grandkids
without creating bad feelings...
SS (married + 2 kids)
GS (married + 1 kid)
PK (married + 3 kids)
JS (married +1 kid)
MS (single + no kids)
also - just starting to read about estate taxes, trusts, etc...
What SHOULD they have done, or can still do at this point ?
they can certainly still do some estate planning (they are not dead yet),
and should do so ASAP. I don't know what their estate is worth, or if they
will be "lucky" enough to die during the one year when the estate tax goes
away before it pops back into life.
I would give everyone $12k (or whatever the current max is) right now. I
would do so again January 1, 2007 and every January 1 from now on.
If they want to even out the gifts (per stirpes rather than per capita) I
would do so in the estate distribution, or use up some of the unified tax
credit now to do so. That evening out should be discussed with the estate
How much is "some money"?
They have not screwed up yet. They can still do it as long as they are
alive. If they have a substantial estate they should talk to a couple
of estate planning attorneys asap.
Well, that's not a financial planning question.
Bottom line, it's their money and they can do with it however they
want. Anyone don't like it? Off the will!!!!
"Gil Faver" will be "lucky" enough to die during the one year when the estate tax goes
I think - from a family point of view -
that things need to be distributed evenly across all
and not "award" the larger family with more,
and the single person with less....
So - I think it will go something like this....
16 total people x $12,000 = $192,000 in gift money
Then - maybe re-distribute it evenly from each family
so that it's more like $192 / 5 family units...
and that would make it about $38k per family.
======================================= MODERATOR'S COMMENT:
Please trim the post to which you are responding. "Trim" means that except for
a FEW lines to add context, the previous post is deleted.
"> So - I think it will go something like this....
you, like me, prefer per stirpes vs. per capita. However, your plan will
invoke gift tax (or partial consuption of the unified credit). Which is ok,
but needs to be considered as part of a well thought out estate plan. I
would hate to use up some of that preciaous unified credit with cash gifts,
if it could be put to better us in conjuncition with an estate plan (such as
putting assets into a trust, at a reduced future value or reduced value as
part of a family partnership, etc).
As my objective is to offer a different spin, let me suggest this;
First, you said parents, plural, the 80 yr olds are both alive. This ups
the gift potential to $24k per recipient per year.
80 tells me the grandkids are probably adults, are there any great
grandkids? The gift limit for a 529 college account is up to 5 years
worth of gifting, or $120K, if the goal is to maximize current gifting
dollars to empty the estate.
They could have and perhaps should, set up a trust to simplify the
distribution on their passing and avoid probate, but that advice depends
partially on the size of the total estate. If the size is high enough to
hit estate tax issues, there's all the more reason to take advantage of
gifting sooner than later.
I can't comment on the 'feelings' except to say that often, money is
given based on need. The successful child seeing little, and the needy
one getting taken care of. (if the needy one is irresponsible, an
irrevocable trust set up with rigid distribution rules can make sense,
as can the purchase of an immediate annuity for that beneficiary. So
s/he will receive an income stream vs a lump sum).
OK that's not an estate planning question either. Not in the sense of
tax laws etc. Yes I know estate planning attorneys actually have
psychologists on staff to deal with that kind of question. But
ultimately it's something you write to Dear Abby about.
I knew where this was headed the moment the OP included a break-down by
family size along with the initials of each of the potential recipients.
I imagine print-outs of this thread will be circulated around a few
Thanksgiving dinner tables next week...
It is *_guaranteed_* there will be bad feelings in this situation,
simply by the fact that the question even has to be asked.
Then, there is the effect of "age goggles" (reference: beer goggles
. By that I
mean, in the ninth decade of their lives, there is a real likelihood
that the parents' views and recollections of where all the kids are in
their own lives are going to be skewed a little.
To the OP's question, "what SHOULD the parents have done", the answer
is: they should have spent or given away (equivalently, designated for
future distribution) more money when they were younger, so that they
would have had time to reap the rewards and accept the consequences of
That right? Do you have a good, current reference? I thought GST was
still an issue, although not for the annual $12K/$24K gift, nor for
paying of medical or college. But for final inheritance, it was still
My overall objective was to gain insight as to how others
might address this (probable) common situation,
and the (probable) associated discussions...if any.
There is already the usual bias's based on 1st born, male vs female, etc.
Now, with some cash tossed on top of that - it's interesting to stand back
and as an outsider.... observe.
"Will Trice" wrote
ISTM that people aspiring towards honor rejoice in the ease
of handling such cases, because little-to-no choice has to
be made. It is as simple as, "Just say 'No.' "
Practically speaking, one solution for the son-in-law here
may be to urge the in-laws to hire an experienced attorney
for advice early on in this process, explaining the
importance of his not biasing the discussions and causing
resentment within the family, and even (or definitely)
asking his wife to tell other family members. The attorney
is tasked with giving unbiased advice (insofar as heirs are
concerned), since s/he has no particular interest in the
estate, apart from minor fees, assuming a person of repute
is chosen. Second opinions may always be had at a small
charge, too. Said attorney may irritate family members, but
s/he is accountable on a few levels to 'do the right (and
legal!) thing,' so s/he is some serious insurance to
minimize ruffled feathers.
Second practical suggestion: Gift to grandchildren the same
amounts in the coming years, but write any trust per
stirpes. ISTM this is one of the more common approaches,
achieving (1) something approximating equal love for all
grandchildren in the grandparents' lifetimes; but (2)
recognizing that the parents who had more kids made that
choice and will enjoy growing older with more family, etc.
No perfect fairness exists. The goal is to be reasonable. A
number of approaches will fill this bill.
I have never seen anything so despicable as people fighting over the will.
Whoever inherits what has done nothing to actually deserve a remembrance.
People who earn and save (or who have inherited wealth) have the right to do
whatever they so please with their estate. I realize the government
designates who shall inherit if a person dies intestate, which is why one
should have a will, but leaving monies in a disproportionate manner is the
right of the dead (or soon to be).
not always true. People working in a family business often work for
peanuts, because they "know" they will get properly compensated "in the
I totally agree. Except when there has been the understanding, express or
implied, that one working all their life for less than their fair worth will
be justly compensated later on.