Founding partner David Cutner was recently featured on eCare Diary, a web community created to help caregivers who are caring for loved ones with chronic illnesses. The site provides caregivers with comprehensive online tools, expert content and resources. The question was about how best to leave money for grandchildren. It is a complex question, and Mr. Cutner gave a few guidelines about what options are available.
Some people wish to leave a bequest to their grandchildren in a Will. However, what happens if you create a trust can you still leave money to grandchildren via the trust? The answer is yes. Trusts are useful in many ways, and irrevocable trusts are the workhorses of Medicaid planning; but they also double as estate planning tools. There can be tax advantages to leaving assets to children or grandchildren in a trust, that are distributed after you pass away, rather than giving assets to them outright while you are alive.
If you make gifts to grandchildren during your lifetime, you are permitted to give them up to $14,000 per year ($28,000 per year if you are married and gift jointly with your spouse) without being required to file a gift tax return, and, a gift up to this value also will not count against your lifetime exemption from federal estate and gift tax. Considering that the lifetime exemption for an individual is currently $5.43 million, bumping up against this limit is not an issue for the vast majority of people.
Estate planning and Medicaid planning often go hand in hand. An Elder Law firm such as Lamson & Cutner can advise you on how best to achieve your personal objectives. See the question on eCare Diary, and Mr. Cutner’s response, at: