financial questions?

jwharding

I'm at a point in my life where I need to do some things. Health is really getting bad. I can't see it getting any better. But what my questions is, I've got some money in an account that me and the wife will never use. It's doing real well and I don't want to sell the stock and close the account, and pay taxes on the cash then give it to my grand kids. Could I just add their name on the account then and after the old lady and me take the big vacation the money would go to them? I'm sure the administration would want their part but I was just wanting to save time and maybe money. What about it. What's the best way to get it in their name. They are 18 and 6 year old. Thanks jw

mark christian

Our resident CPA would know for sure, but I think that the Estate tax exclusion is around $5.3 million. Is your estate worth more than that? You don't have to say so, but be aware that the first five million is not taxable by the Feds. Since you have one child over 18, that child can serve as the younger child's "Property Guardian" if you and your wife both exit at the same time, unless a probate court says differently.

This is where we need our CPA:

As I understand the tax implications of an account with a child's name added to it: Any deposits you made that weren't gifted to the child (up $14,000 per year as gifts are allowed) must be included in your taxable estate for federal and state estate taxes.

cnsay

I believe the type of account also matters. If the account is a 401K or other tax defered account the federal government will tax the account. There are methods to limit the taxes in these cases, a good CPA or financial planner can give you better answers as they will be able to see all your info to work with you on your wishes.

topdad

Half an hour with an estate planner wont cost you too much,
and will give you much more peace of mind.
Not saying of course that all us guys aint plenty qualified
to plot out your financial future.[;)]
[;)]

bigoutside

No.
Do not open a joint account or add them.

Ask your broker about a "payable on death" registration.

Upon your death, the assets will be transferred to the kids. This will happen prior to probate. No administrator. The minor will have to have an administrator or custodian to handle the funds until they reach the age of majority.

Since you mentioned taxes, I'm assuming it's not in a tax deferred vehicle.

Or as mark suggests, you can gift during life. It's pretty easy to do. Ask your broker.
Always gift the most appreciated security. As a rule of thumb.

You can also exceed the 14k gift amount. That's the limit before you have to file a gift tax form, but you don't have to pay gift tax unless you exceed the unified estate/gift credit (which is north of $5mm this year).

slumlord44

Another do not put them on the account. Payable on death is an option but as stated, you need to talk to a good estate lawyer for a lot of reasons. May cost you a few hundred dollars but the peace of mind will be well worth it.

BikerBob

You could also consider a revoke lie trust. Then you can specify their access to the money and if you would like it kept in trust to help pay for education until both are done with school. Lots of options there.

monticellotdm

Givin the 99% likelyhood that the stock market will see 10,000 befor it sees 20,000... i would sell it now and put the kids money in a cd