As a business owner, you may be considering starting an internship program for your company.…
What constitutes a “large” gift can be relative. That being said, if you are considering giving cash or property to someone, a little bit of planning can really help avoid negative consequences. This is particularly true if the gifted amounts are over $15,000.00, will be gifted in property, will be gifted on a regular basis, or if the gift givers — whether parents or grandparents — hold assets that are over $11 million.
Options for Making “Large” Financial Gifts
There are several options you have available to you and your family should you want to provide a large financial gift to your children or grandchildren.
- UGMA/UTMA accounts. The Uniform Gifts to Minors Act (UGMA) and the Uniform Transfers to Minors Act (UTMA) are two ways you can transfer assets to a minor while still having them managed by a custodian. Most states across the country have established these acts, which allows for the management of the assets without creating a special trust. While the accounts are similar in many ways, the types of assets you can transfer to them differ. UTMA allows virtually any type of asset to be transferred to a minor while the UGMA limits gifts to bank deposits, securities, and insurance policies.
- Trusts. A legal agreement instructing someone of your choosing to manage and distribute the assets you leave to your children. Trusts provide many options depending on your family’s circumstances. Control of the assets you leave behind can be then handed over to your children with full access at a time you have pre-determined. Some types of trusts include special needs trusts, health and education trusts, and pot trusts (for a group of minors), and beneficiary controlled trusts.
- 529 accounts. This is a tax-advantaged savings plan that is designed to save money for future qualified education expenses of a minor.
- Direct payments. You may choose to pay a third party directly on behalf of your minor children or grandchildren. For example, you may pay medical expenses or school tuition directly to the medical or educational institution rather than giving the money to a child.
As can be seen, there are several options to consider when deciding how to make a gift.
If you considering this as your goal, let us advise you on the best way to make this a reality. Call for your appointment today!