Midpack
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
I probably shouldn't ask here, but we've moved to a new area and don't know anyone here to ask. I'm not sure I understand a point our estate attorney made yesterday, working him to iron it out, seeking a second opinion here?
We plan to leave 50% of our estate to DW's BIL. His estate exceeds the estate tax threshold and probably always will, so he doesn't need the money. We were planning to leave it to him and giving him discretion to give all or part of it to our 9 nieces & nephews.
Our attorney is suggesting it might be better to give it directly to our nieces & nephews, to avoid additional estate tax on the money we leave BIL, reducing what the nieces & nephews receive (vs giving it to them directly).
The way I understand it, that's only true if BIL doesn't pass the money on to nieces & nephews before he passes away. If we leave him money, estate taxes aren't a factor while he is alive.
And it's my understanding he could give any amount to each niece/nephew without triggering taxes above the $15,000 gift exemption. As I understand it each niece/nephew would have to report the income but there would be no taxes levied then. "[FONT="]If a person exceeds the $15,000 exclusion limit, they must file Form 709 to report the excess gift to the IRS. That doesn't mean a person will have to pay taxes though.[/FONT][FONT="]
That's because in addition to the $15,000 annual exclusion, there is an $11.4 million lifetime exclusion for the 2019 tax year. The lifetime exclusion rises to 11.58 million for the 2020 tax year. Anything reported on Form 709 is applied toward the lifetime exclusion and only amounts exceeding that are subject to gift tax."
[/FONT][FONT="]Again I apologize for seeking an opinion here, if I get no replies I understand.[/FONT]
We plan to leave 50% of our estate to DW's BIL. His estate exceeds the estate tax threshold and probably always will, so he doesn't need the money. We were planning to leave it to him and giving him discretion to give all or part of it to our 9 nieces & nephews.
Our attorney is suggesting it might be better to give it directly to our nieces & nephews, to avoid additional estate tax on the money we leave BIL, reducing what the nieces & nephews receive (vs giving it to them directly).
The way I understand it, that's only true if BIL doesn't pass the money on to nieces & nephews before he passes away. If we leave him money, estate taxes aren't a factor while he is alive.
And it's my understanding he could give any amount to each niece/nephew without triggering taxes above the $15,000 gift exemption. As I understand it each niece/nephew would have to report the income but there would be no taxes levied then. "[FONT="]If a person exceeds the $15,000 exclusion limit, they must file Form 709 to report the excess gift to the IRS. That doesn't mean a person will have to pay taxes though.[/FONT][FONT="]
That's because in addition to the $15,000 annual exclusion, there is an $11.4 million lifetime exclusion for the 2019 tax year. The lifetime exclusion rises to 11.58 million for the 2020 tax year. Anything reported on Form 709 is applied toward the lifetime exclusion and only amounts exceeding that are subject to gift tax."
[/FONT][FONT="]Again I apologize for seeking an opinion here, if I get no replies I understand.[/FONT]