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Randy Marvin Spiro

Randy Spiro’s Answers

17 total


  • Can I give my son and his wife each 13,000.00 as a gift without any of us paying a tax?

    I want to help with a downpayment on a new home.

    Randy’s Answer

    You can give each of them $13,000 in one calendar year without it being charged against your $1,000,000 free lifetime giving amount and without it being charged against your at death free giving amount ($3,500,000 in 2009). But if your son and his wife divorce, she will have a good argument that she should be awarded the $13,000 that you gave her.

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  • What are the tax implications of giving cash gifts to family? Is there a one time tax free option?

    I will be selling my home soon and would like to split the profits with my mother and brother, but it will not be worth it if they have to pay taxes on what I give them.

    Randy’s Answer

    First, the check must clear before the end of the year to be a valid gift that year. Second, the check needs to be deposited in an account in the name of the donee and the donor's name. Whether you make a cash gift or a non-cash gift, the annual free gift per donee is $13,000.
    The portion of the gift in excess of $13,000 per donee per year must be reported on a gift tax return, and it will be charged against the donor's $1,000,000 free lifetime giving amount. This same amount will also be charged against the donor's at death free giving amount ($3,500,000 in 2009). Lifetime gifts in excess of the $1,000,000 are subject to gift tax.

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  • Can real property held in joint tenancy be sold by one spouse with power of attorney due to other spouse's mental deficiency

    Can property be sold by a legal spouse, holding a power of attorney, due to other spouse being legally mential imcompetent.

    Randy’s Answer

    Each state has its own law for powers of attorney. If state law authorizes the creation of a durable power of attorney and if the power complies with state law, then the power of attorney remains effective even after the incapacity of the person who signed it. The power should be examined by an attorney to make sure it contains specific authority to sell the type/category of asset that you are dealing with.

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  • If a parent made out a trust and later had a new trust made is the old trust automatically void in lieu of the new trust?

    My father in law and his wife had a trust drawn up, She passed away and Dad had a new trust made then a few months later he also passed away. Which trust is the one to follow?

    Randy’s Answer

    First an attorney must determine whether the old trust was revocable by the surviving spouse. To the extent it became irrevocable, your father in law may have violated it to the extent he took assets out of the old trust and transferred them to the new trust. Second, an attorney should determine whether your father in law actually transferred assets out of the old trust and into the new trust. If he left assets in the old trust, merely signing a new trust will not cause the assets in the old trust to be subject to the provisions of the new trust. Also, the old trust probably has very specific rules about revoking it, amending it and/or taking assets out of it, so an attorney must determine whether your father in law followed those rules in removing assets.

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  • A/B trust question

    My wife and I are about to go to several local attorneys to see if one could draft a living trust for us. Based on initial phone calls, they say we need a A/B living trust. They said the dead spouse assets go to the B trust up to the federal exem...

    Randy’s Answer

    In an AB trust, the portion of the first spouse to die's assets equal to the exemption goes to the B trust and all remaining assets go to the A trust. In an ABC trust, the portion of the first spouse to die's assets equal to the exemption goes to the B trust, the portion of the first spouse to die's assets in excess thereof goes to the C trust and all the surviving spouse's assets go to the A trust. In an AB trust (if properly drafted) the A trust is subject to estate tax when the surviving spouse dies. In an ABC trust (if properly drafted) the A trust and the C trust are both subject to estate tax when the surviving spouse dies. In either case the surviving spouse's estate is entitled to the surviving spouse's own exemption. Simply put (and if properly drafted) in both the AB and the ABC trust, the ultimate beneficiaries will get the benefit of 2 exemptions, the first spouse to die's exemption and the surviving spouse's exemption. Creating more trusts (3 v 2) does not create more exemptions. The ABC trust allows more assets (ie the assets passing to the C trust) to be restricted, since all assets passing to the A trust are typically revocable and amendable and subject to unlimited use by the surviving spouse. The B and C trusts both are irrevocable and both restrict the surviving spouse's use of the assets. The C trust is typically intended to qualify for the estate tax marital deduction (ie. to zero out the estate tax at the first spouse to die's death) so that the surviving spouse can be the only beneficiary and must receive the income payable at least annually.

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  • Estate Planning

    How do I form a FLP and what is the advantage over a LLP, or C Corp

    Randy’s Answer

    Each legal entity is formed under the laws of a particular state. It is advisable that it be formed by an attorney. The goal is to have assets which are owned outside of the entity to be exempt from liabilities generated inside the entity. It is important to follow all formalities and to adequately capitalize the entity. The entity should also have adequate insurance for all relevant risks. One estate planning strategy involves transferring a business or real estate to a family limited partnership and gifting interests in the partnership to your children. The goal is to reduce estate taxes by qualifying for minority and marketability discounts. The idea is that the fractionalized interests that you give away and the fractionalized interests that you keep have a value that is less than the corresponding fraction of the entity's total value. This discount is determined by qualified appraisals, although the IRS has the right to dispute the discount as well as any appraisals of assets transferred to the FLP.

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  • Estate plan structure

    How would you structure an estate plan for a married couple in California containing only the following assets? 1. Roll over IRA. 2. Home with title held as community property with right of survivorship. 3. No personal property. 4...

    Randy’s Answer

    The home would be deeded by quitclaim to a revocable trust to be prepared by an attorney. The plan should include two pour-over wills to cover assets not transferred into the trust during the couple's life. If the spouse is to get everything under the estate plan, the spouse should be the primary beneficiary of the IRA. Whether the children or the trust is the contingent beneficiary depends in part on whether the children are minors (trust) or adults (children themselves) The plan should include a durable power of attorney for health care decision making. Further, on the IRA, a power of attorney should be executed to give another person access to the IRA in the event of the IRA-holder's incapacity. If the spouse is to get everything, one alternative to the A/B trust is a disclaimer trust which allows the spouse to revoke or amend the entire trust on the first-to-die's death, but which gives the spouse the ability to disclaim (refuse) assets to protect the first-to-die's exemption (the free amount that a person can die with and pay no estate taxes) under which arrangement the disclaimed assets would pass to an irrevocable trust for the survivor's use. The disclaimer must be made within 9 months of the first-to-die's death, which allows the survivor the ability to look at the size of the estate, the size of the exemption and the survivor's life expectancy in determining whether or not to protect the first-to-die's exemption.

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