I have a controversial money topic to discuss

[TrudyCampbell]

I feel that I might get flamed for this but I'm going for it. 

WDYT of people gifting you with money but only after they have died?

I have a great aunt who never married and has been extremely generous to my family. I know that she has a significant amount of money set aside for me because she's had me involved in cashing in savings bonds she put in my name and moving some money around. She has me as a joint person on all of the bonds/accounts to make it easier for me to get the money some day... which I'm assuming is when she has died? We could use this money as a down payment on a home- it would be enough to completely cover the 20% down payment. I would neveeeerrrr bring this up to her, it's her money, she can give it to me whenever she wants or choose to not give it to me at all. But, I don't know, I think the concept of giving family members money but only when you're dead is not something I'd do with my own kids. I'd want to see them enjoy the gifts. 

What do youuu think?

[rjamz]

I know a lot of people who do it that way - like their kids come into trusts after the parents have passed as kind of a security measure for the kids. It doesn't bother me, I get it.

ETA: the people I know also give their kids gifts while they're alive, but not huge ones

Sent from my SPH-D710 using proboards

[musiclover]

My mom has been generous with us over the years and always tells us that for sure she would rather live to see us enjoy it now, than when she is no longer here. I don't blame you for feeling that way, seems odd to wait, right?

[dixeedeluxe]

It depends on my situation.

My grandfather gifted each of his children over $100,000 upon his death. He held that money close because it was invested and that money was still EARNING while he was living. So, it ended up being MORE money than if he would've handed it over while he was living.

That being said, one of my uncles got LESS because my grandfather invested in his failing business while he was living.

My mother is following suit. She gifted my sister money towards the down payment on her hosue and that amt will be written out of her inheritence. She'll do the same for me when we buy.

[dixeedeluxe]

i really really hope my life is such that there will be LEFTOVER MONEY when i die.

[TrudyCampbell]

I think part of the reason it feels strange to me is that I would never want my kids/grandkids to think "Oh I can't wait for Grandma Trudy to kick the bucket so I can cash in".

I do not feel that way about this situation, FTR.

[rjamz]

Also, it could be for tax purposes. Depending on how much it is (over $23k, I think) you'd have to pay a gift tax on it. If it's inheritance, then depending on the value of her estate, you may not have to pay taxes

Sent from my SPH-D710 using proboards

[musiclover]

I like this thread, it's very interesting

[TrudyCampbell]

Aug 27, 2013 10:40:28 GMT -5 musiclover said:

I like this thread, it's very interesting

No vague responses allowed!

[mumegs]

I feel like they should hold onto it in case they need it. My grandma always told us we would get a large inheritance when she died and then in the last few years of her life she lost her only source of income and had to basically use all the money to live on. My family was left with her lake house which is awesome. But I feel like it was her money to do what she wanted with while she's still alive.

[musiclover]

Aug 27, 2013 10:41:00 GMT -5 TrudyCampbell said:

Aug 27, 2013 10:40:28 GMT -5 musiclover said:

I like this thread, it's very interesting

No vague responses allowed!

haha, I just never thought of the tax implications of this, totally was not meaning that I was secretly thinking you are someone else is a greedy bitch. hahahaha. I am just a dork who loves to learn about things like this.
Side note: I know that SFIL has set up college funds for each grandchild, is it bad that I am dying to know what they contribute each year? (huh)

Now back to my amazon lurking so I can find something for Adam's upcoming 5th birthday.

[breezy8407]

I don't really have an strong opinion. Probably because I don't have significant amounts of money coming to me - neither does DH, unless the land his parents own in ND hits huge in oil, which is a long shot. And that's not even that much anymore.

Anyway, my Grandma has been giving large xmas gifts of cash to us the past few years. She is mostly afraid of the government taking her money when she dies, but she has also said she likes to see people spend it.

[puppylove64]

Aug 27, 2013 10:39:47 GMT -5 rjamz said:

Also, it could be for tax purposes. Depending on how much it is (over $23k, I think) you'd have to pay a gift tax on it. If it's inheritance, then depending on the value of her estate, you may not have to pay taxes

Sent from my SPH-D710 using proboards

I don't think the tax implications are the same if it is a joint account with both people's names on it. I'm not certain though....

[charlielove]

I understand where you are coming from. My sister and I were to get a significant inheritance from our grandparents. BUT, they ended up going into a retirement community, and that plus many, many medical bills between the two of them drained those funds pretty quickly. Maybe she is keeping the money until she's passed for those reasons?

We also have a family trust with my parents, that we will inherit when they've passed (as far as I know). I think for tax purposes it's pretty difficult to just hand over that type of money. I know my parents just finished paying taxes on the money they inherited from my grandmother that passed away 14 years ago.

[TrudyCampbell]

Hmm I forgot about taxes. Damn taxes!

[Deleted]

I don't think this is flameful! I totally get it!

I think part of the reason is what if they need it before they die? Medical costs, nursing home, etc...

My FIL's uncle compromised and gives FIL a chunk of money every few years but there is quite a bit more waiting for when he dies.

I don't have any family members with a lot of money so this doesn't apply to me

[Regina Philange]

I think its in case they need the money, and when they pass you get the leftover funds.

[rubber pants]

Gift taxes suck. Its like 30% or something REDIC!

[musiclover]

poof

[rjamz]

Aug 27, 2013 10:47:14 GMT -5 puppylove64 said:

Aug 27, 2013 10:39:47 GMT -5 rjamz said:

Also, it could be for tax purposes. Depending on how much it is (over $23k, I think) you'd have to pay a gift tax on it. If it's inheritance, then depending on the value of her estate, you may not have to pay taxes

Sent from my SPH-D710 using proboards

I don't think the tax implications are the same if it is a joint account with both people's names on it. I'm not certain though....

True, though it depends on how much per year she's putting in Trudy's name.

[Deleted]

Taxes blow. I know families do a lot of money moving to minimize tax implications (TOTALLY LEGAL IRS CREEPERS). Also, as rjamz mentioned, there is a limit you can gift before tax payment is required.

[TrudyCampbell]

I have an uncle who bought all of his kids houses outright and then they paid the mortgage back to him without interest. I will likely never have that kind of cash, but if I do I love that idea.

[Deleted]

I think most people hold onto money incase they need it for medical or whatever as they get older, or live to like 115!

None of our grandparents have any money but if either set of our parents passed away before their 80's we would get a significant amount of money from them but we wouldn't see anything until they die, and if they live a long time we will see nothing.

[irishsara]

I also think, that if you receive a certain chunk of money for a downpayment on the home, you need to receive it a certain amount of time prior to buying the home, and there is a certain amount of money you can count towards a "gift."

I'm not 100% on the facts, so don't anyone call me stupid. I just remember going through something similar when we bought our home. We had to prove where the money came from, and that it was a gift and other stuff...

I would also prefer my children enjoyed the money. But I also think maybe it would make me really mad and sad to see them potentially throw it away on something stupid. I think it would really hurt the relationship, and I would rather not have to deal with that during my last years.

[jaime183]

I think it depends on how long you are going to live. Someone who lives past 80 these days needs a lot more money- especially if they are going to need care- either a home or home health care that isn't covered by their insurance.

Also, it depends on how much money (whether there's any way to possibly spend it all before they die), and how many people are splitting it.

DH is an only child so his parents know he's getting everything eventually

[Deleted]

I am planning on creating a Brewster's Millions scenario for my heirs.

[katfco]

Aug 27, 2013 11:32:51 GMT -5 @veronicasawyer said:

I am planning on creating a Brewster's Millions scenario for my heirs.

I love that movie!

[biblionerd]

I'm the last person to ask about money, but I know in our own situation the inlaws have told DH and his brother how much they will get when they die. It just feels morbid to me, because I'm not going to lie... it's more money than I thought we'd ever have in our lifetime. We're not talking millions or something, but let's just say I have nothing coming from anyone on MY side of the family. Anyhow, it's a combination of investments, retirement, life insurance, etc. I don't know the ins and outs, but they said that is how much we will get if they die before 80, but something like it will go up until 90, and then down significantly after that or something. So even though it's money they don't need (and partially can't even get) right now, they WILL need some of it when they get to a certain age. So I mean, I'd LOVE to have a chunk of that money now, but it's THEIRS and if they need it to live on after a certain age then it's theirs to have to do that with.

[fryjack2]

My grandfather wanted to die penniless. He was like Warren Buffett (except the billions) and wanted his children to earn their own money. He gave a lot of money away, but not to my mom or her siblings, or to us. Damn it! ha!

We will most likely gift money to our children every year for tax purposes, and because I don't see a point in waiting till I'm dead. When the boys were born, we did our estate planning (no that we have much of one now) and based on the advice of our lawyer, we set up trusts.

Someone asked about loans when home buying-----I'm pretty sure that when you buy a house, you are allowed to be gifted 13k without it being an issue. Higher than that and the banks start to hesitate.

[eav2c]

Eh, I totally get saving and not gifting it all while alive. Getting old is one of the most expensive things a person can do. My grandma who died last December was in a high end nursing home that cost 10k a month and in addition to that she had to have a certain amount in assets in the event she had to end up in the hospital wing. She did end up in the dementia/Alzheimer's which accounts for some why it was so expensive but you simply cannot predict these things. It was all private pay, as most nursing homes are, so saving while alive to not burden those while you are dying is a big deal. I'd much prefer to be in a home that I was very well cared and not a burden to my family than gifting everything I've got before I die. I've been on the end of having someone who needs a nursing home with no savings/assets/etc and vice versa. I am glad my grandmother saved rather than gave out money for down payments, etc. She was able to be extremely well cared.

Eta: We did always get extremely generous gifts in recent years (not so much growing up). It was my grandmas POA sending checks though. When one sibling or cousin got married, every grandkid got a check. Her memorial service isn't until October due to my shithead uncle. We do discuss how we will spend (or not spend) our inheritance but I can honestly say I am grateful she planned for aging and dying.