Transferring Wealth to the Next Generation

[RSKY]

What is the best way to transfer wealth to the next generation?

My parents came from nothing, both lost their fathers at a very young age and grew up rough. Worked hard all their lives and left a respectable estate worth more than they would have ever believed. My in-laws did the same. F-I-L passed last yeas as did my mother. Now we sit here waiting for the final settlements and I wonder what is the best move I could make to ensure my grands do not struggle. We do not live extravagantly, don't spend a lot of money or party. We do plan on traveling a bit. Daughters and their spouses are hard working and successful. Wife and I are a big part of our grand's lives and are instructing and training them.

What is the best step to take?

RSKY

 

[ruffdog]

Tax free gifts should be $16k this year.

The Three Ways To Make Tax-Free Gifts And Why You Should Use Them Soon

 

[quicksandfarmer]

The federal estate tax exemption is $24 million for a married couple so I assume you're not talking about sheltering from taxes. If you are, for that amount of money you need to talk to a tax professional, internet advice isn't going to cut it.

I assume your question is how to pass the money along in a way that most benefits the recipient -- gives them the most value while not ruining their lives? The problem is everyone is different. What would be best for one person might not be best for others.

 

[Racenut]

We're making the assumption we'll have something left to transfer. Ours is simple, when we are both dead, the two kids split whatever is left. I encourage my kids to max their ROTH IRA contribution every year. They don't because they aren't going to suddenly start listening to me now.

 

[MossRoad]

...

What is the best step to take?

RSKY

Consult an attorney that specializes in estate planning.

 

[RSKY]

Consult an attorney that specializes in estate planning.

Let’s just say that some in my family have been badly served by “estate planners” and leave it at that. Came close to loosing a third of the money involved.

I have talked to an advisor at a large financial institution where I have my IRA and other investments. I outlined my short term plans as I have them outlined on Excel step by step for the next year. After I finished he laughed and said it was as good or better plan than he could have given me.

I am looking for long range plans and ideas.

RSKY

 

[Ken]

Let’s just say that some in my family have been badly served by “estate planners” and leave it at that. Came close to loosing a third of the money involved.

I have talked to an advisor at a large financial institution where I have my IRA and other investments. I outlined my short term plans as I have them outlined on Excel step by step for the next year. After I finished he laughed and said it was as good or better plan than he could have given me.

I am looking for long range plans and ideas.

RSKY

 

[Ken]

We use a living trust. this means when we are gone the Children get the property and no legal fees to pay.
Now as to what to watch. is a son-in-law.
as soon as can finger the assets. there will be a notice of Bankruptcy and the government will back him and his family will lose.

 

[Torvy]

The BEST way is to make sure you pass along a good work ethic and understanding of economics and personal finance. Our goal is to make sure our kids have a stable footing to do well regardless of any assets that remain after our passing.

Death taxes vary wildly by state. Remember this is the total value of your property, not what you paid for it, or how many $ you have in an account. If your county has appraised your property upwards, you may be asset wealthy, but cash poor. This happens to many who live on inherited acreage. It can be extra sneaky if you live in a state that does not increase property taxes on your homestead. Example, a state fixes property taxes at purchase value (or thereabouts); you and spouse live there for 30+ years; the county assessor values the property based on what it is worth if sold; Your once $100k property could be worth many millions. Taxes paid will be based on that...not to mention the value of your equipment, livestock, timber, etc.

18 States With Scary Death Taxes | Kiplinger

Federal estate taxes are no longer a problem for all but the extremely wealthy, but several states have their own estate taxes and inheritance taxes that could still hit your heirs.

www.kiplinger.com

 

[Yander]

Your situation sounds VERY similar to ours, right down to the involvement in grandkids lives. Especially with what is about to occur with the influx of IRS agents, I still think your going to need to consult estate planners. My thought though would not be to use attorney's only but a combination of attorney's and tax advisers since they both have a part to play in it. We use both and we happen to have really good ones.

I think you need to spend some time asking around and find some good ones. They are out there.