Moving into assisted living this wed, and RE agent prepared to sell house soon. Should I have her deposit funds into my ckg account which heirs have access and can then move into their accts?
If my sons suddenly have 6 digit funds in their accounts, is there an income tax risk?
The best situation would be to put the proceeds into an account that passes to a trust when you pass or are incapacitated. Your sons could be co-trustees and handle things that work best for them.
If you give them more than $18k, (the gift limit for 2024,) it will most likely be taxed as income.
Good info, thanks. After endless efforts finally got son as co-owner to my bank accounts.
Would this solve it?
On second thought, move proceeds to Vanguard?
If that action legally gives him half the value of the bank accounts he may already have a tax obligation if it’s over $18k. Time to get tax advice from a fiduiary.
That would probably work if he’s a beneficiary or the account ownership is handled in a will or trust.
Without a trust than your brokerage account and checking accounts will pass as lump sums to your beneficiaries. For the inherited IRA your sons will need to complete withdrawal of the IRA funds after 10 years and will need to do annual RMDs if you have started on RMDs .
You can set up a trust if you for example wish for a more gradual distribution of funds to your heirs. The terms of the trust could state how much your children will receive and at what ages. The costs of setting up a trust include the initial lawyer fees and also trustee fees depending on whom you select as trustee.
Many thanks, all. Moving into asst living is complicated enough without this wall.
Sons are bennies on both VG and bank accts.
I just checked… you are correct. Probably not a problem with his kids.
So true!!! This is overwhelming…
I’m pretty sure that if you have your son on your checking account as co-owner, that he owns half of anything you deposit in that joint account. If you just have the one heir, it’s almost a moot point. The other issue would be filing gift tax paperwork, not necessarily paying gift tax, as others have mentioned.
If you deposit the proceeds in somewhere in your VG accounts, and they are in your trust, and not co-owned by your son, then he gets control only after you die. Easy peasy.
I think it would look less suspicious if he moves large sums of money into his accounts after you die, not before.
Glad to hear you’re moving into assisted living so soon (to me it’s soon) and I hope you like it there.
Many thanks! I had NO IDEA it would be this difficult. All kinds of med tests/blood, TB etc to prevent sick people from living there.
I’m just going to xfer the house sale funds into VG. Seems the simplest,
Assuming your are single, FDIC insured limit on checking account is $250,000. You don’t want to exceed that limit. Also, checking accounts are paying MISERABLE interest. Why not do something simple like this: Put the proceeds into a money market fund at Vanguard, Fidelity or whatever where you will be receiving interest of a little more than 5% per annum. Then using the brokerage transfer program, you automatically transfer a fixed amount each month into the checking account that you mentioned.
Thanks.
That is my plan
Superb post!