Know the Risks of Gifting Money, Unwrap Peace of Mind Instead
Manage episode 407187379 series 3558640
With the holidays upon us, you might be tempted to gift large sums of money to your children. But Jeff warns against this seemingly generous practice because gifting money and/or assets carries real and potential risks, including loss of control, severe tax implications, and inability to pay for long-term care.
Jeff recommends a more thoughtful and lasting gesture—give peace of mind. Do the things that will serve your children best in the long run. Make sure that your affairs are in order. Have your powers of attorney in place. Pre-plan your funeral. Set up a trust to ensure your money and assets are protected and preserved so that your children can enjoy the peace of mind that you wish for them.
What You Need to Know
(02:12) It's important to understand all the rules before you start gifting money or other assets.
(04:51) Why not gift money? (1) You lose control while you’re still alive. (2) You could create a heavy capital gains tax burden for your children. (3) If you need long-term care (LTC), the money might not be available when you need it.
(09:40) If you want to gift money every month, you may gift up to $500 in total—not $500 each to multiple people, but rather, $500 combined per month.
(11:57) Nursing homes have a right to sue under the filial responsibility statute, meaning that the children are responsible for their parent’s nursing home stay.
(13:59) So, what should you give your children? Peace of mind is a great gift. Pre-plan your funeral. Make all of the arrangements. Make sure you have your financial and medical powers of attorney in place.
(18:02) As parents start to look toward the future, many decide to create a pure grantor trust.
(22:10) If you want to learn more about pre-planning and trusts, visit www.bellomoassociates.com or call 717-845-5390. We offer free educational workshops so that you can be well informed.
About Bellomo & Associates
Jeffrey R. Bellomo, the founder of Bellomo & Associates, is a licensed and certified elder law attorney with a master’s degree in taxation and a certificate in estate planning. He explains complex legal and financial topics in easy-to-understand language.
Bellomo & Associates is committed to providing education so that what happened to the Bellomo family doesn’t happen to your family. We conduct free workshops on estate planning, crisis planning, Medicaid planning, special needs planning, probate administration, and trust administration. Visit our website (https://bellomoassociates.com/) to learn more.
Links and Resources MentionedBellomo & Associates workshops:https://bellomoassociates.com/workshops/
- Life Care Planning
- The Three Secrets of Estate Planning
- Nuts & Bolts of Medicaid
For more information, call us at (717) 845-5390.
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