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Gregory Herman-Giddens
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Gregory Herman-Giddens’s Answers

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  • Should my Mom's House bet put in her irrevocable trust or change the deed to joint tenant with me or my sibling?

    My mother has a irrevocable trust with all her assets worth about $1M but does not include her house which is worth about $250K. She bought the house for $150K 20 years ago. Is it better to put the house in the Trust or to have the deed to the hou...

    Gregory’s Answer

    It is not really possible to answer your question without reviewing the trust. With $1.25 million of assets, estate taxes will not be an issue, but capital gains tax on the the sale of the house may be. Also, future eligibility for Medicaid for nursing home care may be affected by a transfer of the home. I recommend consulting with an attorney in order to be fully informed before making a decision.

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  • If I give a relative $150,000, will they have to pay gift tax?

    Looking to make a gift to a child of $150,000, all at once. How much will they have to pay in tax on this?

    Gregory’s Answer

    The 2016 federal gift tax exemption is $5.45 million. As long as you have not previously used your exemption, no gift tax will be due. However, you will be required to file a federal gift tax return reporting the gift.

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  • When I establish an irrevocable trust for my 7 grandchildren who pays the income taxes from reinvested dividends in the trust?

    Grandchildren are 7-13 years in age. I'm trying to get money invested using gifting guidelines removed from my (and my wife's) assets and not subject to our annual taxes. Can this be done?

    Gregory’s Answer

    Generally, the trust would pay the tax in this case, meaning very high rates will be imposed. The 39.6% bracket will apply to income over $12,400, along with the 3.8% Net Investment Income Tax. However, you can establish trusts or Uniform Transfers to Minors Act accounts that will cause the income to be taxed to a grandchild. Keep in mind that the "Kiddie" tax will apply to the grandchildren's unearned income over $2,100 (taxed at their parents' rate).

    A good estate planning/tax attorney can help you determine the best way to accomplish your goal. Best wishes.

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  • Question about trust

    I am a co-trustee with my two brothers on an irrevocable trust set up by my grandparents. Both of my grandparents have passed away and recently both of my parents have passed away. My brothers and I are equal co-trustees in the trust. My brothers...

    Gregory’s Answer

    My sympathies for the recent loss of your parents. In order to advise you, an attorney will first need to review the trust document. I recommend consulting with an experienced trust and estate attorney, who should be able to assist you. Best wishes.

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  • How are my capital gains calculated?

    I am 53. In 2004 my widower father, with whom I live, had a Warranty Deed drawn up. He is the Grantor and I am the Grantee. The deed has a Special Power of Appointment allowing the Grantor a lifetime residency in the home. This past October he die...

    Gregory’s Answer

    You became full owner of the house in 2015 upon your father's death. Because your father retained the right to live the house for his lifetime, the basis for capital gains purposes was "stepped up" to the fair market value on the date of his death.

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  • Is forming an LLC or S -Corporation better if one is married but concerned about the implications of divorce?

    I am starting a business with a 2nd party while while the future solvency of my marriage is uncertain. Would an LLC or S-Corporation offer the most protection against dissolution of marriage?

    Gregory’s Answer

    LLCs (at least multi-member LLCs in Florida) are more protective against creditors of an owner than corporations. One can have an LLC taxed as an S Corporation by making an election with the IRS.

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  • Can the same person create an irrevocable trust and serve as the trustee?

    In florida, can a person creating an irrevocable trust serve as the trustee if all the beneficiaries are different (i.e. a person creating it is the father, father would be trustee, and all beneficiaries would be the father's children)?

    Gregory’s Answer

    Yes, it is possible, but depending on the circumstances, there may be adverse estate or income tax consequences. An estate planning attorney can advise you on the implications and suggest the best way to structure a trust.

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  • Is there a special form for a gift deed?

    My parents are going make a gift for me, it is going to be a transfer to a bank account. Where can I find draft of such deed?

    Gregory’s Answer

    Deeds are for transfers of real estate; none is needed for a cash gift. If your parents are U.S. citizens or residents, all that is required is that they file a federal gift tax return if the gift exceeds $14,000 from each of them ($28,000 total). If this is the case, they should have a knowledgeable CPA or tax attorney prepare the return(s) for them.

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  • We want to create a living will.we are rtwo senior citizens

    Married 8 years ago.one has two adult daughters and other has one adult daughter and two adult sons. our retirement has to go to both respective kids and husband has some property in other country to go his kids.House and other two investment pr...

    Gregory’s Answer

    At a minimum, a complete estate plan for ALL adults includes a Will, Durable Power of Attorney, Health Care Power of Attorney, Advance Directive for a Natural Death (Living Will), and an Authorization for Use and Disclosure of Protected Health Care Information (HIPAA Authorization). While you refer to a Living Will, it seems as though you may actually thinking about a Living Trust. Revocable Living Trusts are used to manage assets in the event of incapacity and avoid probate. I recommend consulting with an estate planning attorney to see what type of plan is appropriate for you.

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  • 401K receiving account

    In order to receive some part of my ex's 401k plan, do I have to make some special bank account (IRA account, tax qualified account)? or can I just receive it into my regular checking account? I have been a stay at home mother and I am not fam...

    Gregory’s Answer

    • Selected as best answer

    If the 401(k) is being divided as part of a divorce settlement, a Qualified Domestic Relations Order is needed to avoid triggering immediate tax. A QDRO must be signed by a judge. Upon receipt of the QDRO, the 401(k) custodian will set up a separate account for you. A qualified family lawyer should be able to assist you.

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