Jewish World Review April 18, 2000 / 13 Nissan, 5760
$10,000 limit on gifts
DEAR BRUCE: I am retired, and I would like to transfer some of my assets to my children. How much can I pass on to them each year without incurring a tax problem for them or for me? Is the law the same in all states? -- M.S., Yakima, Wash.
DEAR M.S.: This is a federal law, and federal laws are the same in all 50 states. You are allowed to give $10,000 per year to any one person without tax consequence to that person. If your children are married, you can give $10,000 to your child, $10,000 to their spouse, and technically, $10,000 to each of their children (although I do not suggest that you do this). There is no tax impact on the giver or the receiver within these limits.
DEAR BRUCE: My daughter is a stay-at-home mom with one child, and her husband earns about $700 a week. She recently received $10,000 from a negligent driver award, which she put into a CD that earns about $150 every six months. Is this the best place for it? -- C.B. (e-mail)
DEAR C.B.: If your daughter is going to invest in CDs, then she is only going to receive a pittance in return for her investment. But to receive a better return, she would have to take a degree of risk. CDs are the least desirable way to go unless you are absolutely certain that you are not willing to take any risk at all. Whether she should invest in a mutual fund that is somewhat conservative or aggressive is a question that you will have to answer yourselves.
DEAR BRUCE: You talked about the safety of viaticals in a recent article. I would like to know what they are. -- G.K. (e-mail)
DEAR G.K.: Viaticals are a system whereby a person with a terminal illness who has life insurance can collect on the life insurance before they die by having an investor put up as much as 60 percent of the money to be paid by the insurance company upon their death. The investor then becomes the beneficiary of the policy and pays the premiums. Upon the death of the insured, they receive their money back plus the profit.
Viaticals certainly have a very important place in our spectrum of financial vehicles, but unfortunately, like many fields, this has been invaded by rascals; it's very important to know who you are dealing with before you become
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03/08/00: Real-estate lawyers are essential
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02/29/00: Paying for nursing-home care
02/28/00: Rely on a real-estate lawyer
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12/27/99: Checking up on investment handlers
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08/16/99: Thinking about PMI
08/13/99: Short-term mutual funds a-OK
08/11/99: It's your job to shop around
08/10/99: Sometimes, roots need to be uprooted
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08/06/99: Only you can determine your investments
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08/03/99: Reverse mortgages good for the elderly
08/02/99: Get the survey BEFORE you buy the house!
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