dividing up gift & estate money

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 planning attorney.

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!!!!

Sure it is. "Estate planning" is also expressly mentioned as an acceptable subject in this newsgroup's charter.

-HW "Skip" Weldon Columbia, SC

"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).

One plan I'm aware of set up two pools (50% each) for each generation. Then they subdivided each generation equally.

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).

JOE

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.

taxes are all about "feel good" actions resulting in bad feelings.

[quote 1] [quote 2] >> But >>ultimately it's something you write to Dear Abby about. [quote 3] > taxes are all about "feel good" actions resulting in bad feelings.

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 their actions.

-Mark Bole

"Elle" wrote

Scratch the above. Googling indicates it is outdated and appears to be invalid under current tax law.

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 there. JOE

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.

"joetaxpayer" wrote Regarding minimizing taxes through generation skipping transfers of wealth at death:

See for example

OTOH, I see other sites like and that indicate you are right, and I was originally right. So I am back to my original suggestion: The OP or his in-laws should investigate this further.

Well said. Difficult to do in some cases, maybe especially in cases like this, but good advice anyway.

-Will

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).

Elizabeth Richardson

not always true. People working in a family business often work for peanuts, because they "know" they will get properly compensated "in the end".

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.

> and > that indicate you are right, and I was originally right. So > I am back to my original suggestion: The OP or his in-laws > should investigate this further. >

I just took another look at this. Form 709 addresses this, my only caveat on it; the form is still dated 2005, I don't know if there was a change in the figures or GST in generat since then. Your first link above is to a page that's © 1993, 1995. That can't be good.

The OP, FWIW, never mentioned the total amount but I'm suspecting the $12K/person/yr was enough to cover the intent, and I believe the 529 multiple can cover a great deal above that if desired. JOE