Indiana Estate Planning & Elder Law

Friends of the Firm Friday - Linda's Daughter

We recently visited with Linda’s Daughter, an Indianapolis-based service offering end-to-end senior moving management and aging-in-place services.

Linda’s Daughter takes an empathetic approach while working with seniors.  Understanding the client’s goals and fears is their top priority. Once the client's goals are known, the team at Linda's Daughter works to exceed expectations.

Individual team members intentionally work with the clients to preserve, sometimes in new ways, the memories they have made over a lifetime.  

Senior move management starts by collaborating with clients to plan out a new space - be it a modification to where they currently live or a complete move. Clients have found envisioning a new space to help eliminate stressors around rearranging furniture or downsizing items.

Typically, the senior move management service begins with a home visit from an occupational therapist (OT). The OT will give expert advice on what modifications will need to be made for the client to be safe and suitable going forward.  From there, the team at Linda's Daughter will propose a complete project plan which includes the OT's recommendations. Once the plan is approved by the client, the team at Linda's Daughter will:

• Begin the search for qualified contractors;
• Manage contractor quotes; 
• Oversee the work being done;
• Declutter the space;
• Rearrange furniture.

Items not being moved will get sorted into groups:

• Sell;
• Give away (to charity or family);
• Preserve;
• Trash.

The team at Linda's Daughter will then sell designated items, make item donations, manage the physical move (or rearranging), and conduct any final cleaning. Most importantly, they get the client settled into their new or new-to-them home. From making the bed, hanging photos, stocking the fridge and more - aging in place services are wide-ranging and vary from client to client. 

Linda's Daughter serves clients throughout the metro Indianapolis area, Marion County, and surrounding Central Indiana counties.  They are a member of National Association of Senior Move Managers (NASMM), thus giving them a great network of senior move managers throughout the country for interstate moves. 

Linda’s Daughter can be contacted by calling 317-999-9787 or my emailing [email protected].  

Written by: Lisa Burris

Will Your Gift Be Taxed?

Every year, you’re allowed to give another person up to the annual gift tax exclusion—this year $14,000—without reporting the transfer to the IRS or having to pay taxes on the sum, says CPA Cari Weston, senior technical manager of the American Institute of CPAs taxation division.

 Have you ever wondered if a large financial gift could trigger a gift tax? Many parents find themselves in a position where they want to give a large sum of money to an adult child in need, but they aren’t sure of the tax implications.

One such parent recently wrote to Money and asked if he could give $15,000 to a child to pay off the child's debt.

The answer, given in a Money article titled "When Does a Gift Trigger a Tax Bill?," contains a good explanation of the basics of the gift tax.

As the article explains, you can give up to $14,000 a year to any one individual without triggering the gift tax. You can also give up to $5.43 million in total gifts during your lifetime.

For married couples those numbers are doubled.

It is important to note that more can be given to pay tuition or medical expenses. Gifts for those purposes are always tax-free.

If you need to give more than that to a child, you might be able to if your child is married. You can give $14,000 to your child and up to another $14,000 to your child's spouse.

If you have other questions about the gift tax or want to know how making gifts can be integrated into your estate plan, speak with an estate planning attorney.

Reference: Money (May 5, 2015) "When Does a Gift Trigger a Tax Bill?"

Give Money Now – Or Later?

For those who are fortunate to enjoy their retirement and have enough money to leave behind, they might be wondering whether it is best to leave an inheritance or gift their assets?  Although the percentage of taxes owed on gifts and inheritance is the same, one is inclusive and one is exclusive, and the dollar difference between the two is huge.

One important aspect to the decision is the potential tax consequences.

This is why some people struggle over whether they should give money now to family members so they can see the benefits of that money or whether it is a better idea to leave those family members an inheritance. They know there are different tax rules depending on giving now or later, but what are those rules?

In neither case will the recipient have to pay taxes on the money. Nevertheless, as the Wills, Trusts & Estates Prof Blog explained, in a recent article titled "To Gift or Bequeath? That is the Question," the recipient might receive more money if you give it to them now.

As the article explains, if you are in the 40% tax bracket and give someone $1 million today, you will be required to pay $400,000 in taxes on the gift. However, if you have precisely $1.4 million and leave it all to someone in an inheritance, then the entire amount would be taxed at 40%.

That would make the actual amount inherited $850,000, not the $1 million that could be gifted with the exact same amount of money.

Of course, it is not quite as simple as that and you should speak with an estate planning attorney before reaching a decision whether to gift now or leave an inheritance.

Reference: Wills, Trusts & Estates Prof Blog (May 4, 2015) "To Gift or Bequeath? That is the Question"

Charitable Gifts: It's All in the Delivery ... At Least for Tax Purposes

 

 

 

 

 

 

 

 

 

Photo: (C) Miss Cara Photography 2020

It's never a bad idea to review date of delivery rules for charitable gifts. These rules determine the date that a gift was made and any tax consequences of the gift. Here are the general rules for determining date of delivery for some types of  property when given as a gift.

For tax purposes, a charitable gift is deemed made on the day the gift was delivered to the charity. This has important implications in tax law as it determines what laws apply.

If you are planning on giving to charity now or even during the holiday season, you need to know when your gifts will be considered delivered.

In 2014, the Wills, Trusts & Estates Prof Blog published a list of delivery dates for common types of gifts in an article titled "Date of Delivery for Gifts." In summation, here are the “dates of delivery” for commonly given assets:

• Securities – The day when hand-delivered or mailed via the U.S. Postal Service.
• Mutual Fund Shares - The day when the fund manager transfers the shares to the charity.
• Checks - The day they are sent in the mail, as long as they are not post-dated.
• Personal Property - The day the property and title are received.
• Real Estate - The day the deed is received or when it is registered, if required by local law.
• Credit Cards - The day a bank transfers the money to the charity.

NerdWallet takes this information a step further by unboxing the 2020 gift tax rates. Essentially this details who pays (the giver or recipient) when a gift has been given. If giving a gift, first consider whether it will be once-in-a-lifetime or on multiple instances over many years.

To ensure your generosity complies with the tax law as falling safely within tax year 2020, or if you have any other questions about charitable giving, contact an experienced estate attorney sooner rather than later.

Gifting Advice for Grandparents

Helping out family members is to be encouraged, but can raise a number of legal issues involving taxes and eligibility for public benefits, as well as questions of fairness among family members. Here are six issues grandparents should consider before making gifts to family members.

Are you planning a gift to your grandchildren? Grandparents normally have a strong desire to take care of their grandchildren. They want to make sure that the grandchildren have everything they need. Often this means that grandparents will make ill-advised gifts to the grandchildren. There are some things that need to be considered to make sure that any gift you want to make is appropriate. In an article titled "Six Things to Consider Before Making Gifts to Grandchildren," JD Suprapublished a list of things to consider.

The list includes:

• Gift or Loan - Make sure you really want to give a gift. If you expect to be paid back, it is a “loan” and you should get the terms in writing.
• Equal Treatment - If you give more to one grandchild than another, it could cause resentment within your family.
• Tax Requirements - Consider whether the gift is taxable and make sure you report any gifts that need to be reported.
• 529 Plans - If the gift is primarily for educational expenses, then it might be a better idea to use a 529 college savings plan.
• Keep What You Need - Make sure you do not give so much money to your grandchildren that you are unable to meet your future expenses.
• Long Term Care - When deciding how much to give, include the potential costs of your own long term care in a nursing home as part of the money you might need in the future to meet your own expenses.

The above list is not exhaustive. There are many other things you might want to consider before making a gift to grandchildren. Talk to an estate planning attorney about gifting and how it can fit into your overall estate plan.

Reference: JD Supra (September 4, 2014) "Six Things to Consider Before Making Gifts to Grandchildren"

When An Inheritance Hinders Financial Aid

"Kids inherit money. We don't want it."

Sometimes too much inheritance all at once is a threat to moral development, it’s true, but sometimes a gift can threaten a college education by complicating financial aid.

As parents of the college-bound understand to a dizzying degree, financial aid is a difficult calculus of have and have not. It is often an entirely necessary salvation. Unfortunately, the types of income a parent or a student of a parent receive will have dramatic influences both on the availability of financial aid and the ease with which it is attained.

In other words, sometimes an inheritance can be a threat to financial aid and the college degree of a young person, especially if there are family issues at play.

Enter the story of “Robin” as relayed in a recent Forbes article titled “An Inheritance That Could Foul Financial Aid.” Truth be told, the story of Robin and the potential difficulties of her children with financial aid is as much a story of family disagreement as it is of grumpy institutional curmudgeonry. Nevertheless, it is worth considering Robin’s story of family disagreement and the details a FAFSA will sniff out, even if they are not available and true.

What is even more important is to understand that different assets, inheritances and gifts will have a serious effect on financial aid, taxation and/or financial viability for higher education. If your goal is to financially assist your loved ones through college, then there are some very specific types of gifts to consider without jeopardizing financial aid in the process.

Reference: Forbes (November 18, 2013) “An Inheritance That Could Foul Financial Aid”