Guidelines for Gifts and Joint Accounts





Guidelines For Gifts

An outright gift is the simplest and easiest technique. An outright gift removes the asset from the donor's estate immediately. However, thought must be given to the amount, use, and financial experience of the recipient.

The annual exemption for the federal government ($13,000) per donee, per year. For federal tax purposes, any transfer of the annual exemption is reportable but not taxable up to $1,000,000. However, the credit for taxes paid is available at the death of the donor.

Note, however, if the donor gives away more than $1,000,000 and pays federal gift tax, if he or she dies without a taxable estate, there is no refund of the previous amount paid.


Guidelines For Joint Accounts


Joint ownership of property has traditionally been regarded as a simple method to avoid probate administration. This may prove to be an acceptable "poor man's will" for a small estate. However, there are areas ow which you should be aware.

The interest of Joint Tenancy By Rights of Survivorship differs from Tenants In Common. Although ownership by JTROS is usually between related parties, it does not have to be. However, TE is always between married parties. For real property, TIC allows an owner to freely alienate his interst in the asset during his life or through his Will at death. At the death of a co-owner in common, the share of the remaining owners does not automatically increase.

For real property, TE can be helpful as a creditor if one cannot execute on the property. For bank accounts, the creditor of a joint account holder will be allowed to reach the account because he or she has the ability to withdraw funds from the account.

The joint ownership of property may affect Medicaid eligibility. Joint ownership of accounts will certainly be countable resources subject to the rights of the community spouse.




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