Thank you for this and all the other videos; with the upcoming reduction of estate tax limits; we're nearing that level and dusting off old volumes of asset transfers to minimize estate taxes Starting to do annual gifting now just to get the top off and Keep It Simple. Finished off the SNT for our adult son and considering starting to fund that with annual gifting. Question remains our rental property and desire to help daughter with her house, but unsure how to get that going while optimizing the tax consequences :D
Steven, thank you for your comment. We really appreciate your feedback. The SNT can provide and excellent income tax planning opportunity when it some to IRAs that we will soon cover on your TH-cam page: www.cunninghamlegal.com/special-needs-trusts-a-lifeline-for-your-loved-ones-future/
Agree. Thank you. Great info. I will be needing your administrative help at some point. I'm my parents co- trustee & they have "crafted" a very complicated Living Revocable trust that will bequeth to myself & my three brothers our individual IRREVOCABLE heritage trusts...
Thank you for leaving a comment! We truly appreciate your trust in us and stand ready to assist you with your family's estate planning needs. Please feel free to reach out whenever you are ready for our trust administration support.
Question - I don''t quite understand the number you showed in "Gifts in Trust" at time 4:00 of the video. If the couple gives each of the 3 children the annual gift tax exemption, that's total of 6 times the annual gift tax exemptions. Plus, they can each gift the irrevocable trust up to annual gift tax exemption as well, right? That's another 2 times the annual gift tax exemptions. So together it should be 8 times, so why you show under "Total Gift" column as 6 times? My understanding is that people can gift to the irrevocable trust with their children being beneficiaries separate from gifting to children directly, am I correct?
@@CunninghamLegal Hum... I searched this topic online and found "Crummey Powers ... in which the court ruled that the as long as a trust beneficiary has the right to withdraw a gift to a trust, the gift qualifies as a present interest gift and the annual gift tax exclusion will apply....", and "When you gift to an irrevocable trust, the gift must still be evaluated on a per donee basis. For the gift to qualify for the annual exclusion, each beneficiary must have a present interest in the gift. .." Anyway, I could be wrong, but just for your reference. Thanks.
@@ericchen1205 Broadly speaking you are correct. One human can give another human up to $18K in 2024 and not have to file a gift tax return. A “Crummey Power” permits a gift to a trust and still qualify for the annual exemption. If one human gives another human $18,001, then a Form 709 Federal Gift Tax Return must be filed.
Another question - Irrevocable Grantor Trust - the video in time 10:30 says for Irrevocable Grantor Trust the assets are not part of the owner's estate".... I think that's not correct. According to IRS, the assets held in an irrevocable grantor trust generally remain included in the grantor's estate for estate tax purposes. So if the goal is to reduce estate tax, then one should set up Irrevocable Non-Grantor Trust, not Irrevocable Grantor Trust?
An irrevocable grantor trust can be written in a way to be excluded from a decedent’s gross estate. A grantor trust is ignored for INCOME tax purposes while the grantor is alive. It is not ignored for estate tax purposes. This can be an extremely valuable inter-generational wealth creation tool. Contact us if this is something you are interested in: www.cunninghamlegal.com/california-law-offices/contact/
That’s not exactly right about life insurance being tax free. My father had 2 life insurance policies. Neither had a beneficiary on them. So, guess what. They went into probate and were taxed.
We are sorry to hear that the life insurance went through probate and was taxed. Properly structured, life insurance can pass free of death taxes and probate. This is why it’s important to hire a savvy lawyer to get things right!
Is it better to gift a friend $700k or buy the house she wants ? What I don't want it the government to come in one day and ask her. "Where did you get the $700 k in cash to buy this property? You make 50k a year" maybe filling taxes under her lifetime gift tax free ? The $700k taxes have already been paid on it. I just remembered George Clooney announced he gave 13 friends one million and then IRS came around haha
Thank you for this and all the other videos; with the upcoming reduction of estate tax limits; we're nearing that level and dusting off old volumes of asset transfers to minimize estate taxes
Starting to do annual gifting now just to get the top off and Keep It Simple. Finished off the SNT for our adult son and considering starting to fund that with annual gifting.
Question remains our rental property and desire to help daughter with her house, but unsure how to get that going while optimizing the tax consequences :D
Steven, thank you for your comment. We really appreciate your feedback. The SNT can provide and excellent income tax planning opportunity when it some to IRAs that we will soon cover on your TH-cam page: www.cunninghamlegal.com/special-needs-trusts-a-lifeline-for-your-loved-ones-future/
Thank you for making these available, very interesting!
Our pleasure! Thanks for leaving a comment.
Agree. Thank you. Great info. I will be needing your administrative help at some point. I'm my parents co- trustee & they have "crafted" a very complicated Living Revocable trust that will bequeth to myself & my three brothers our individual IRREVOCABLE heritage trusts...
Thank you for leaving a comment! We truly appreciate your trust in us and stand ready to assist you with your family's estate planning needs. Please feel free to reach out whenever you are ready for our trust administration support.
Question - I don''t quite understand the number you showed in "Gifts in Trust" at time 4:00 of the video. If the couple gives each of the 3 children the annual gift tax exemption, that's total of 6 times the annual gift tax exemptions. Plus, they can each gift the irrevocable trust up to annual gift tax exemption as well, right? That's another 2 times the annual gift tax exemptions. So together it should be 8 times, so why you show under "Total Gift" column as 6 times? My understanding is that people can gift to the irrevocable trust with their children being beneficiaries separate from gifting to children directly, am I correct?
No. The current gift tax exemption amount is $18K per person, per donee, whether outright or in the type of trust we described.
@@CunninghamLegal Hum... I searched this topic online and found "Crummey Powers ... in which the court ruled that the as long as a trust beneficiary has the right to withdraw a gift to a trust, the gift qualifies as a present interest gift and the annual gift tax exclusion will apply....", and "When you gift to an irrevocable trust, the gift must still be evaluated on a per donee basis. For the gift to qualify for the annual exclusion, each beneficiary must have a present interest in the gift. .."
Anyway, I could be wrong, but just for your reference. Thanks.
@@ericchen1205 Broadly speaking you are correct. One human can give another human up to $18K in 2024 and not have to file a gift tax return. A “Crummey Power” permits a gift to a trust and still qualify for the annual exemption. If one human gives another human $18,001, then a Form 709 Federal Gift Tax Return must be filed.
Another question - Irrevocable Grantor Trust - the video in time 10:30 says for Irrevocable Grantor Trust the assets are not part of the owner's estate".... I think that's not correct. According to IRS, the assets held in an irrevocable grantor trust generally remain included in the grantor's estate for estate tax purposes. So if the goal is to reduce estate tax, then one should set up Irrevocable Non-Grantor Trust, not Irrevocable Grantor Trust?
An irrevocable grantor trust can be written in a way to be excluded from a decedent’s gross estate. A grantor trust is ignored for INCOME tax purposes while the grantor is alive. It is not ignored for estate tax purposes. This can be an extremely valuable inter-generational wealth creation tool. Contact us if this is something you are interested in: www.cunninghamlegal.com/california-law-offices/contact/
That’s not exactly right about life insurance being tax free. My father had 2 life insurance policies. Neither had a beneficiary on them. So, guess what. They went into probate and were taxed.
We are sorry to hear that the life insurance went through probate and was taxed. Properly structured, life insurance can pass free of death taxes and probate. This is why it’s important to hire a savvy lawyer to get things right!
Is it better to gift a friend $700k or buy the house she wants ?
What I don't want it the government to come in one day and ask her. "Where did you get the $700 k in cash to buy this property? You make 50k a year"
maybe filling taxes under her lifetime gift tax free ?
The $700k taxes have already been paid on it.
I just remembered George Clooney announced he gave 13 friends one million and then IRS came around haha