California | Wills and Trusts
Legal Question
I am the sole beneficiary of my deceased uncle's trust, and he left a will naming me his sole heir and executor of the estate. (He had no children). HOWEVER, I believe my cousin - his niece - who was always there for him and who has financial issues of her own ought to get a third of the estate - about $60,000. My tax guy suggested I simply do this through a series of $13,000 gifts paid from the trust account. This strikes me as cumbersome. Others suggest that I pay the whole $60,000 from the trust account. While my cousin was not named in the will, I have no doubt that this gift would be consistent with his desires. What say you? Thanks.
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Legal Answer
If you make the $60,000 gift now, it means you have $47,000 less of the lifetime gift tax credit to use. It may not be an issue for you, as the credit is $1,000,000, but if you have significant assets, it could mean your own beneficiaries could pay more in tax, and you're back to making the yearly $13,000 gifts.
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Christopher B. Johnson, Attorney at Law 790 East Colorado Boulevard, Ninth Floor Pasadena, CA 91101
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