Giving While Living?

[RetireBy90]

While DM was still alive I managed her investments for her, probably about last 15 years, my sister managed her monthly bills. About 7 years into managing her money her pile was generating much more than she spent so I suggested a one time gift to her 3 kids. That kept up for about 7 or 8 years. One to each kid and one to the spouse to double the limit.

unfortunately it started to be expected to some degree and I got a couple questions about when this year's money was coming. We used to fund our kids IRAs when they started out, for about 4 or 5 years.

I would recommend random gifts for some purpose as has been suggested, perhaps for a specific need if known.

We will pass a house to each of 2 kids and a small (6 figure) sum but the rest we plan to donate to charities we support today (big on those to support military vets).
Just one person's plan, or rather 2 people's.

 

[Car-Guy]

While DM was still alive I managed her investments for her, probably about last 15 years, my sister managed her monthly bills. About 7 years into managing her money her pile was generating much more than she spent so I suggested a one time gift to her 3 kids. That kept up for about 7 or 8 years. One to each kid and one to the spouse to double the limit.

I assume your DM fully understood and was ok with what you suggested?

 

[ivinsfan]

I assume your DM fully understood and was ok with what you suggested?

How is this your concern?

 

[Car-Guy]

How is this your concern?

He made the statement on a public "discussion" forum that seemed a little unusual to me. I just asked a question so I can understand it a little better....Maybe I misread it... If he doesn't want to answer/clarify that's okay... Why do you care?

 

[CardsFan]

Our situation is a bit different, as we have one DS who will be our sole heir. We plan to do some significant QCD's when we get to RMD age (7 years from now unless the rules change again), but the balance will go to him (and DDIL).

But, on a side note, we have a potentially significant inheritance coming from DMIL, who is 90. DW's share would be over $500k. Could be soon, could be 5+ years. She is in pretty good health for a 90yo, so I am betting on the 5+ years. We definitely do not need the money. Ideally we would have DMIL change her beneficiary from DW to her grandson (DS). Not a good topic to bring up, we have let it lie.

I think we will take any inheritance and gift it annually to DS and DDIL up to the maximum allowed without reporting. So they would get it over the course of 7-10 years. While we may have some tax consequences, they will get it tax-free. If that works well, we may just continue the practice with our money when the inheritance runs out.

 

[Car-Guy]

Our situation is a bit different, as we have one DS who will be our sole heir. We plan to do some significant QCD's when we get to RMD age (7 years from now unless the rules change again), but the balance will go to him (and DDIL).

Sorry, another "question"... What's a QCD?



I get RMD's, DDIL, DMIL, DS etc but I'm missing QCD.

 

[Lewis Clark]

Sorry, another "question"... What's a QCD?

I get RMD's, DDIL, DMIL, DS etc but I'm missing QCD.

Here is a good explanation.
https://www.fidelity.com/building-s... the benefits,regular withdrawals from an IRA.

 

[Car-Guy]

Here is a good explanation.
https://www.fidelity.com/building-savings/learn-about-iras/required-minimum-distributions/qcds#:~:text=A%20QCD%20is%20a%20direct,payable%20to%20a%20qualified%20charity.&text=In%20addition%20to%20the%20benefits,regular%20withdrawals%20from%20an%20IRA.

I probably missed that one since I limit my charitable contributions (as mentioned above in post #3 of this thread.) Still learning new things..


Thanks

 

[Momcpa]

My in-laws gifted us some money when we were first starting out to help pay down our mortgage.....their suggestion of how to spend it, and we agreed. Last year I received a few thousand from an aunt's estate. We gifted most of that to our 2 adult children with the story of the in-laws giving us money early in our marriage, how it helped pay off that loan early and suggested they do the same with my aunt's funds. But we noted to them that that was only a suggestion, and we realize that once we 'gift' it, it's theirs to do with that they want.

This next week we are gifting to each child a few thousand on OUR anniversary along with the same suggestion.....apply it to your mortgage. But again, that's only a suggestion and they can do what they want. Side note: although both thanked us for the 1st gift, neither told us what it was used for. Their choice. And none of our business.

It has crossed my mind whether or not this will become an "expected" event. But then that's OUR choice.

 

[kjpliny]

I'm reluctantly gifting to the inflation monster just about every day. Not much left over.

 

[brett]

Our overriding gift will be the gift of tuition and other edu costs for post secondary and graduate studies (if applicable) for our grandchildren. Those monies or bequests take precedence over any inheritance to their parents, our children.

Our children have both had good starts and are managing well. Our funding of their children's edu is a significant benefit to them in that they have less monies to save for this.

Nothing to nieces or nephews at this juncture. The ones that need it have failed to demonstrate any strength in managing their personal finances or personal growth. It would be monies frittered away on nonsense.

 

[RetireeRobert]

I probably missed that one since I limit my charitable contributions (as mentioned above in post #3 of this thread.) Still learning new things..
Thanks

QCD---Qualified Charitable Distribution from IRA accounts for those in the RMD age zone.

I am now in the RMD phase myself, and last year, after my IRA balances fortuitously ballooned and drove up my RMD amount, and that drove up my taxable income, I was glad to read a reminder from Schwab about QCD's!

After DW passed, I was already in a phase to be much more charitable than I had been, so the thought of being able to make some significant charitable contributions that would at the same time reduce what would otherwise be taxable income greatly appealed to me. A solution sitting there on the books that solved my newfound problem!

Just read something today about Secure Act 2 proposals. One of them would index the $100,000 allowable QCD annual limit to inflation. So future year QCD allowable limits might grow significantly over time. Hope that proposal makes it into law!

 

[Car-Guy]

^^^^


Good to know, It "may" become useful information in my case in a few more years.

 

[Midpack]

Well I misread DW. When I asked DW to read the applicable chapters in Die with Zero about giving more to charities and some to nieces & nephews now - she said "no way, we can spend more on ourselves!"

I don't know what makes me think I can always predict how she will react, I still get it wrong from time to time, even after 41 years.

 

[Sunset]

....

But, on a side note, we have a potentially significant inheritance coming from DMIL, who is 90. DW's share would be over $500k. Could be soon, could be 5+ years. She is in pretty good health for a 90yo, so I am betting on the 5+ years. We definitely do not need the money. Ideally we would have DMIL change her beneficiary from DW to her grandson (DS). Not a good topic to bring up, we have let it lie.

.....

Check with a lawyer to see if this will work, but I think your DW could reject the inheritance of $500K and it will then fall to your DS to inherit.

 

[CardsFan]

Check with a lawyer to see if this will work, but I think your DW could reject the inheritance of $500K and it will then fall to your DS to inherit.

Thought about that, but it is all set up as TOD and POD, so the will plays a very little part. What I don't know if these would be "per stirpes" (I think I got that right), because there is always the chance DW pre-deceases her Mom. In which case I don't want/need the money, but I know DMIL would want it to go to our son.

Again, first world problems.

 

[SecondCor521]

Thought about that, but it is all set up as TOD and POD, so the will plays a very little part. What I don't know if these would be "per stirpes" (I think I got that right), because there is always the chance DW pre-deceases her Mom. In which case I don't want/need the money, but I know DMIL would want it to go to our son.

Again, first world problems.

Your wife can probably disclaim even TOD/POD assets. The way it works, when I researched it, is that a disclaimer is treated as though your DW has predeceased your DMIL (even though she hadn't). It would then pass according to the provisions of the will (if it's a probate asset) or via alternative beneficiaries (if TOD/POD and set up that way), or via state intestacy laws if nothing else applied.

Also note that federal law allows partial disclaimers. So your wife could say, "I disclaim $100K" and still receive $400K or whatever. The $100K would go as per the previous paragraph; the $400K would go to your DW.

 

[Scuba]

We don’t have kids but have one niece and one nephew who are adults. We haven’t given either any substantial cash gifts, but we did just sponsor a family trip with them, their partners, and us. We paid for lodging and a private boat charter for a day, their grandmother bought their air tickets, and they covered meals, a rental car and incidentals.

Really nice way to spend time together. We felt doing it this way was better than paying for 100% of the trip. We wanted them to have some “skin in the game” and figured if they didn’t value the trip enough to fund their own car and meals, they could turn us down.

Don’t think we will make it an annual event because there are too many other travel priorities DH and I have for ourselves, but we are glad we did this one.

 

[audreyh1]

Well I misread DW. When I asked DW to read the applicable chapters in Die with Zero about giving more to charities and some to nieces & nephews now - she said "no way, we can spend more on ourselves!"

I don't know what makes me think I can always predict how she will react, I still get it wrong from time to time, even after 41 years.

Wow! I’m glad you found that out! I guess you’ll be spending more!

 

[audreyh1]

Gifting travel expenses/sharing travel experiences certainly seems like a great approach for people close to you. I’ve thought about that a lot over the years, wanting to do exactly that with family members. We’ve done a little. It’s not been very available because them having jobs and kids schedules, and us having obligations to DF and a rather fixed schedule of always meeting at DF’s home for holidays.

But I think now with DF passed breaking the rituals there will be more opportunities to have (fund) family get togethers at fun locations or do joint travel with childless siblings as they get older.