Gift Tax

[BLinNY]

What is the name of your state? New York

My wife's grandmother passed away leaving an estate valued at $450,000. This amount belongs to one of 3 siblings (Sibling A). Sibling A now wishes to gift equal amounts to her other 2 siblings (Siblings B & C).

Sibling B, cannot show assets, and has signed over her deed and control of her assets to one of her children.

What is the tax impact on the child who has control of Sibling B's assets?

 

[tranquility]

Why make the gift to B? Make the gift to B's kid. File the gift tax return accordingly. Make sure there are no strings (must be used for your mom) on the gift or you could be committing fraud.

 

[BLinNY]

Thanks Tranquility!

Do you have any idea of the Gift Tax rate? Also, would it be proper to establish some kind of trust for my wife's mother? We have heard mention of something called a supplementary trust but cannot find any meaningful information on this topic.

Thanks

 

[tranquility]

Unless the gift would put the person over their lifetime exclusion amount (currently $1,000,000), there would not be a tax due. The gift tax return is only a reporting to let the government keep track of lifetime gifts.

To establish a trust for a person who cannot have assets (probably for medicare), you are going to have to see an attorney. This is as complex an area as there is and little mistakes are very easy to make. It is not a self-help task.