When do you die?

[rk911]

Our NW is mid 7-figures but that is recent. We've been donating to charity for decades. As our NW increased our donations have increased. Total donations in Ty2023 will be in low 6-figures. We have no children so the bulk of our estate will be going to various charities when we're both gone.

 

[Dash man]

We’re both 67 with borderline eight figures NW including real estate. We’ve been gifting to our boys for several years, by check at Christmas and by free rent on homes they’ll inherit. We fund 529 plans for each of our grandkids and for a deceased nephew’s kids. We pay for family trips occasionally, mostly for siblings.
We’ll keep enough to not be a burden to our kids. I have no idea how long we’ll live, but DW definitely has the better history of longevity in her family. Her father lives with us at 90. My parents both died young.

 

[jpeter1093]

Here's a wrench; are all you gifters withdrawing IRA monies to gift? Who pays the tax if you do? I assume you do or are all the posters talking about after tax money. I'd love to gift more but don't want to take a tax hit to do it.

 

[Alan]

Here's a wrench; are all you gifters withdrawing IRA monies to gift? Who pays the tax if you do? I assume you do or are all the posters talking about after tax money. I'd love to gift more but don't want to take a tax hit to do it.

So far for us it has all been after-tax money. When all the after-tax money is gone then it will be tax free money from our Roths. We will be well into our 70s when all the after-tax is gone so if we had IRA money left it would have been subject to RMDs anyway. (We converted our IRA money to Roth over the first 12 years of retirement)

 

[Surewhitey]

In Illinois, a good time to start giving money away is when your net worth hits $4m. Illinois has an estate tax of 16% if your estate is over $4m.

That’s from a financial standpoint. But really a good time to give money away is whenever you feel comfortable doing so.

I'll have to go with the latter since $4m is a ways away. Plus I live in TX, without any tax on estate or gifting.

I did just have an epiphany for LTC & gifting. If you want to cover for the 5 yr look back rule, just keep a 5 yr cushion on hand and then go to Medicaid. Anyone else thinking about this?

 

[VanWinkle]

In Illinois, a good time to start giving money away is when your net worth hits $4m. Illinois has an estate tax of 16% if your estate is over $4m.

That’s from a financial standpoint. But really a good time to give money away is whenever you feel comfortable doing so.

Or just move from Illinois to a state that has no estate tax, income tax, and much lower property taxes. Tennessee maybe.......

 

[street]

We have one son and his family that will inherit everything at some time. We haven't gifted on any regular basis but have gifted a couple of time when we thought it would help them out on very large purchases.

They do very well financially with high paying careers and don't need money. In fact, they have been looking at ways to invest money other than markets. They pay quarterly taxes so gifting is or could be more of a problem than what it is worth for them.

So, no gifting for us to them at this point. I have some reservations for doing gifting to young people, but I would be there as their backup or lifeline if they need money. They know this but for now they need to do it on their own and no handouts from us unless they need it.

Not condemning any that gift to their children on a regular basis. I think back how nice it would have been to receive some larger gifts from mom/dad. The fact is there wasn't enough to get a monetary gift but their gift of being there for us was enough of a gift.

 

[pb4uski]

When do you die?

Hmm... I wish I know but the real question is that if you have "enough" and a bit older.. When is a good time to start to give away your money to your kids, relatives and charity?

Some relative lives poor the entire life and died with a massive asset just to give away to someone they don't know really know, instead of helping while they were alive.

I am not saying it's the right or wrong way to do it. Your thought?

Enuff

I have one of those. An aunt and uncle who live fairly modestly compared to how they could given a mid seven-figure portfolio... they are in their late 80s and still snowblow their driveway in the winter and mow their own lawn in the summer when they could well afford to hire it out. Dear Uncle slipped off the mower a few years ago and his hand got caught in the blade almose severing his thumb and damaging his four fingers. He had to be airlifted to a major medical center for surgery. Luckily, he had a full recovery but still insists on mowing his own lawn. I'm trying to convince him to relocate from their long-time home to a very nice CCRC when they would not have to worry about meals, would have other people their age nearby for fellowship, assistance from the staff for my aunt with her dementia, etc. to no avail.

Everytime I am at their home they have classical NPR playing. I have tried to convince him to do a QCD from his IRA and be the anonymous listener behind an offer to match any donations for a period fo time, but also to no avail (to my knowledge).

In short, I have been doing as much as I can encouraging him to spend more to improve his and my aunt's quality of life in their remaining years and also give some away while they can enjoy seeing the benefit of their contributions, but no-go.

Meanwhile a bunch of charities will get a lot of money once they pass.

 

[street]

I have one of those. An aunt and uncle who live fairly modestly compared to how they could given a mid seven-figure portfolio... they are in their late 80s and still snowblow their driveway in the winter and mow their own lawn in the summer when they could well afford to hire it out. Dear Uncle slipped off the mower a few years ago and his hand got caught in the blade almose severing his thumb and damaging his four fingers. He had to be airlifted to a major medical center for surgery. Luckily, he had a full recovery but still insists on mowing his own lawn. I'm trying to convince him to relocate from their long-time home to a very nice CCRC when they would not have to worry about meals, would have other people their age nearby for fellowship, assistance from the staff for my aunt with her dementia, etc. to no avail.

Everytime I am at their home they have classical NPR playing. I have tried to convince him to do a QCD from his IRA and be the anonymous listener behind an offer to match any donations for a period fo time, but also to no avail (to my knowledge).

In short, I have been doing as much as I can encouraging him to spend more to improve his and my aunt's quality of life in their remaining years and also give some away while they can enjoy seeing the benefit of their contributions, but no-go.

Meanwhile a bunch of charities will get a lot of money once they pass.

There are a lot of people like that and could live better and do maybe better with their money. I know many like that very wealthy and live very frugal. I see nothing wrong with it, it is their money and can do what makes them happy and do it their way. Good for them!!

I personally would never try to convince anyone what to do with their money or try to do what I think is best for them. If the party asked, I would suggest and help to a certain degree but never overstep. Even my own kid I would not tell how to manage his finances.

 

[Healthy Lifestyle]

There are a lot of people like that and could live better and do maybe better with their money. I know many like that very wealthy and live very frugal. I see nothing wrong with it, it is their money and can do what makes them happy and do it their way. Good for them!!

I personally would never try to convince anyone what to do with their money or try to do what I think is best for them. If the party asked, I would suggest and help to a certain degree but never overstep. Even my own kid I would not tell how to manage his finances.

I agree and hold firm that it is a very personal matter for someone who had worked and saved there entire life! However, old age probably will soften my thoughts!

 

[pb4uski]

...I personally would never try to convince anyone what to do with their money or try to do what I think is best for them. If the party asked, I would suggest and help to a certain degree but never overstep. Even my own kid I would not tell how to manage his finances.

I agree and hold firm that it is a very personal matter for someone who had worked and saved there entire life! However, old age probably will soften my thoughts!

Those are fair points and I fully understand the thought on staying in my lane and these suggestions have been neither unwelcome nor welcome... uncle just listens and nods and doesn't say much.

I will be the executor and my aunt has dementia so if my uncle predeceases her then making sure that she is taken care of will be my responsibility. There is no way that she can continue to live alone if my uncle predeceases her so she will likely need to move to memory care and it would make things a lot easier for me and an easier transition for her if they were in a CCRC that includes memory care... she would just move down the hall to a different part of the facility... not to mention easier for him in the meantime.

 

[street]

I have an aunt that is in her late 90's was married to my late blood uncle and they had no kids. A very wealth couple and lived very high but were very frugal minded.

I was the closest nephew to them when growing up, we spent all holiday and were there or they were at our home. They were my God Parents also. She always gave me a same amount for my BD every year till just a few years ago.

She has a lot of nephew and nieces on her side and my side of the family. I would call her often just because she was always in my life even up intill the last several years.

On one of my last calls with her she mentioned one relative that is just after her money and that she told her she was done giving her money. So, about 5 years ago I stopped having contact with her because I didn't want to be in any way accused of buttering up for some of her money. I have heard she is upset that I stopped the connection. I think about it often but the rest of my side of the family can do all the brown nosing and I hope they get what they are after.

I knew she had a will she told me that, but I bet I'm not in it now. That is okay and really don't care what happens to their very large legacy.

 

[pb4uski]

^^^ Why don't you call her today just to have a chat... and if the opportunity presents itself clear the air?

 

[street]

Ah, no I will leave it as is, we still send a card at Christmas with a note and some pictures.

 

[VFK57]

When people make plans, G.d may laugh at it, an old well known proverb. DW and I have A Trust and it goes to our only son, who is going to decide on our 3 grand kids: who deserve what. Our son manage 58 techs and 6 supervisors at his job. We hope he will manage properly our inheritance.

 

[rk911]

Here's a wrench; are all you gifters withdrawing IRA monies to gift? Who pays the tax if you do? I assume you do or are all the posters talking about after tax money. I'd love to gift more but don't want to take a tax hit to do it.

Assuming you're not referring to gifts to charity thru QCD. The tax on withdrawals from an inherited IRA are paid by the recipient but the basis is reset when the IRA is transferred.

 

[pb4uski]

^^^ Please elaborate on basis is reset when the IRA is transferred and impact, if any, on taxation of withdrawals.

 

[pacergal]

Here's a wrench; are all you gifters withdrawing IRA monies to gift? Who pays the tax if you do? I assume you do or are all the posters talking about after tax money. I'd love to gift more but don't want to take a tax hit to do it.

No, use regular savings or inherited after tax brokerage account.
We stay under the IRS gift tax amount.

 

[O2Bfree]

Here's a wrench; are all you gifters withdrawing IRA monies to gift? Who pays the tax if you do? I assume you do or are all the posters talking about after tax money. I'd love to gift more but don't want to take a tax hit to do it.

I could withdraw from an after tax account, but I have to drain the TIRA I inherited from my mom, so it may as well come from there. It's not a huge amount so it doesn't hurt much tax-wise.

 

[mcbraemer]

If you have money to gift, you are probably a saver. Many, but certainly not all, of those who do not have much money are spenders. Changing a spender into a saver is as difficult as you changing from saver to spender. Look carefully if gifting to a spender will enable a destructive habit, such as drug use, gambling, non work, etc. I have seen lives ruined by large monetary gifts. Funding 529s is one way to reduce the chance a spender will put your gift to poor use.

Very good advice!

 

[Rustic23]

We started three years ago. If you are reasonably sure you won't needot all why not. I admitt I was a little nervous, but all is on course. Neither kid 'needs' the money, should be OK in retirement, but will have a few better nights out. And, that has made us happy, and money well spent.

 

[CRLLS]

I have an aunt that is in her late 90's was married to my late blood uncle and they had no kids. A very wealth couple and lived very high but were very frugal minded.

I was the closest nephew to them when growing up, we spent all holiday and were there or they were at our home. They were my God Parents also. She always gave me a same amount for my BD every year till just a few years ago.

She has a lot of nephew and nieces on her side and my side of the family. I would call her often just because she was always in my life even up intill the last several years.

On one of my last calls with her she mentioned one relative that is just after her money and that she told her she was done giving her money. So, about 5 years ago I stopped having contact with her because I didn't want to be in any way accused of buttering up for some of her money. I have heard she is upset that I stopped the connection. I think about it often but the rest of my side of the family can do all the brown nosing and I hope they get what they are after.

I knew she had a will she told me that, but I bet I'm not in it now. That is okay and really don't care what happens to their very large legacy.

You upset the woman who has been a part of your entire life and you have had connections with over the years, so that you don't upset some others? I really don't understand that. I really hate to write this, F*** how those others may react. I would call her. I'm sure it would make her day.

 

[kgtest]

When do you die?

Hmm... I wish I know but the real question is that if you have "enough" and a bit older.. When is a good time to start to give away your money to your kids, relatives and charity?

Some relative lives poor the entire life and died with a massive asset just to give away to someone they don't know really know, instead of helping while they were alive.

I am not saying it's the right or wrong way to do it. Your thought?

Enuff

I read somewhere that statistically every year past 90 you are 50% less likely to be alive the next...or something like that...don't quote me.
would be able to make it work on her own.

I run calculations to 100, but I likely will die sometime between 85 and 92. I figure a 95% chance of that. So, I plan for 92..and can see the data up to 100 if need be.

Lots of unknowns though. What will future inflation be? What will stock returns be? What will SS benefits look like? Will my pension convert to cash value at some point?

92 is the year I plan firmly to.

The most stress and highest SORR will be when I retire during my kid's college years. They have some college money, but with the way prices are, they won't have enough to cover it all. So they may need to punt there. IF any of our folks pass along, that will definitely free up some cash to help cover the college, and perhaps Grandparents kick in some which I am not counting on.

I just know, the first five years of my/our plan will be stressed in a downturn with college expenses so I need to save a BUNCH of cash in the next 10 yrs to retire at 50 to 52 like our plan states.

 

[MarieIG]

Here's a wrench; are all you gifters withdrawing IRA monies to gift? Who pays the tax if you do? I assume you do or are all the posters talking about after tax money. I'd love to gift more but don't want to take a tax hit to do it.

I'm not taking out of IRAs to gift. I'm working on Roth conversions at this point so will not be withdrawing from IRAs to gif (until QCDs), and gifts have been within tax thresh holds.

 

[Koolau]

Here's a wrench; are all you gifters withdrawing IRA monies to gift? Who pays the tax if you do? I assume you do or are all the posters talking about after tax money. I'd love to gift more but don't want to take a tax hit to do it.

We've become very accustomed to sending significant chunks of money to Uncle Sam as we (try to) deplete our 401(k) money. It doesn't factor into our giving to kids or other (non-charity) giving. Our charities, are all tax exempt, so we often get very significant tax refunds since we are forced to pay 20% of 401(k) withdrawals to the gummint up front.

We've just become used to the process and it bothers us very little. It becomes habit. Still not too bad as last year we only paid (total) 12% in taxes. That's manageable (and it's "our fair share.")

Next, I want to start doing QCDs which will require us to open tIRAs and fund them from the 401(k). I hate the complications that will cause, but it seems like a good idea. Lots of advantages to QCDs. YMMV