I use zell for my kids because that’s what they have. I do use Venmo for other transactions though. My Venmo is tied to a credit card so I’m only liable for $50 if it goes wrong.
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I just deposited a transfer from our Schwab acct to S’s Schwab checking account. It’s the 1st time i’ve done it and it was very easy.
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Same tax implications.
My kids have the same bank accounts they’ve had since they were babies (and were tied to my account)
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I deposit directly into their accounts that are joint with me (was their minor accounts). These accounts only still exist so we can make these sorts of transactions. All their real banking happens in accounts I can’t see.
I then text to say I put $xx in your account or they might not even notice.
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We just deposit into their accounts…at a local branch here. We have the account number and that’s all we need to deposit.
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I have an “interesting” situation to deal with regarding giving 3 “kids” cash/gifts//how I will distribute when I die.
One kid hasn’t spoken to me much at all in several years. I hope that will change, but who knows.
One kid is a step-child, and that kid has very wealthy parents on the other side.
I don’t feel like I have to give all 3 of them similar amounts, but haven’t figured out what does feel right.
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We do this as well!
I think many of us have “interesting” situations for varying reasons. One of my kids has a chronic condition which she’s had since grade school which has been disabling for her. My S on the other hand is happily traveling and working at his own business and has saved up a nice nest egg. He’s happily married and lives in a lovely brand new condo that they rent. I get along great with both but D is more likely to move back to our hometown than S.
We gifted both of them a debt-free college education at same high priced private U. We have been supporting D all her life.
We are trying to figure out an estate plan that makes sense.
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I have 2 kids and they are listed as equal beneficiaries on my 401k accounts. The older one is listed as the beneficiary on my bank account. I’ve told her to keep it or split it with her sister, up to her. I have no way of knowing how much will be in those accounts when I die, and it might not be anything at all. The older child is the one who would need the cash, who still has student loans to repay, who is still trying to find a career. The other has a lot of money and at one time made it clear that she wanted me off her bank accounts and didn’t want to discuss banking with me (even though it was my career) so I took my name off her accounts and her name off mine.
I know my kids. The older one will split anything that’s left in the regular accounts, maybe after any expenses. The only thing else I have is personal property, one car (currently) and I don’t think they are interested in any of that stuff.
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I think it’s important to communicate with your kids/future heirs as best you can why you are planning whatever you’re planning so that they will understand your reasoning and not think that you love the neediest the most and that’s why that child is getting the most assets (cash or anything else of value).
It’s also important to remember that none of us knows what the future holds—the kid that seems to have it all could get hit by a car or chronic condition that makes their life very tough and may need assets as well.
One way of handling the potential possibilities is to write the will in a manner that allows a potential heir to disclaim (refuse) portions of the items being left to him/her in favor of another heir (sibling, niece, nephew, in-law, child, parent). A good estate planning attorney can talk you through some of these options.
If one disclaims, one can’t decide who gets their share. It goes in accordance with the Will, or if the Will is silent as to where it goes if you disclaim, then asset goes as if the person disclaiming died before the testator.
If one has substantial assets, it’s really worth finding a good estate attorney so that your wishes can be carried out as well as possible and your estate doesn’t end up going to taxes, probate fees and other places instead of the people you want to have what you’ve worked hard to save.
Also good estate attorneys have seen a lot—how things work well and NOT so well after death and can bring up things you may never have considered with potential solutions for you to ponder.
We like being able to give some significant gifts to our kids while we are around to see how they choose to use the gifts and the enjoyment it brings.
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I mentioned way upthread that we did a big revisit to our trust mid last year. The estate attorney was recommended by a Fidelity advisor. It took many months to get on her calendar, but she was great!
We do gift annually to both early-mid 30s kids with the expectation that they use it to maximize their retirement investments. We file the proper documentation. Gift tax form 709? Lifetime allowance, as of now, is far less than we’d ever exceed.
Also have a nicely funded 529 for GD along with a placeholder one in my name for now, hopefully for future grands.
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We did start S’s solo Roth-401K and hope he continues to contribute to it. We also gave him some funds so he could start his business as gifts over 2 years so we never had to file a gift tax return. Between two spouses over 2 years, you can gift a lot and not need to file anything.
Yes I keep track for Gift Tax.
Just found this article about trying to figure out how to gift to loved ones.
I read through the article. How on earth are you supposed to know every one of your beneficiaries financial situations well enough to know their tax brackets? And people’s ’ financial situations change all of the time . It may be completely different when the time comes. And, tax laws change. And people move to other states with different tax laws.
We may be odd, but we look at inheritance money as “ free” money. If someone inherits money, it’s nothing they earned and they should not complain about paying taxes on it. And yes we have had to pay.
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I agree. It makes for an interesting academic exercise but implementing it in real life is another matter. The overarching idea to keep the most money in the hands of the beneficiaries (v in the hands of the IRS) is a worthy goal, but this would require a lot of reassessing and likely redrafting over time. Life is just too fluid
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While I don’t think that this article is very useful for long range planning, I think that if someone with wealth has been told that they have just a few months to live, it could be very helpful. Our estate is divided into 3 for each of our 3 children. I don’t see much argument from them except for a few personal items such as paintings and jewelry, and even then, the paintings aren’t valuable as much as sentimental. Their tax brackets are probably similar. Of course, that could always change. We are okay for now.
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Perhaps a more fruitful way to minimize taxes is using gifts vs leaving all of it in the estate. For example, D is a PhD candidate so her income is below capital gains levels. I gift each kid the same amount each January, but she gets hers in highly appreciated stock. She can then sell those with no cap gains to either her or me. She then uses part of the proceeds to max out a Roth IRA (another tax win). S is in finance, so he gets cash, often raised from loss investments so that it created capital losses for me to use.
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I don’t believe gifted stock gets a stepped up in basis. The stepup in basis in on death but not on a gift of appreciated assets.
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