How do you gift money?

Question

We are selling the family home. Mom has usefrux after dad died. How can she gift money to her children?

Answer 1

There are several ways - since it is only your mother, she can give $11K per person w/o having to report the gift (tax free and un-reported). You can also place it in a charitable trust and that allows for distribution tax free but she has to give up control of the estate as it can not be self directed. Last go to the IRS web site and see some other methods -
http://www.irs.gov/publications/p950/index.html

Answer 2

If your mother had usufruct of the home, you need an attorney to advise you of how the proceeds of the home are distributed.

If your mother wants to give the children money from her share of the proceeds, she can avoid all tax paperwork and implications by giving a maximum of $12,000 per individual per year. No gift tax return will be required, no tax will be paid by your mother, and there are no implications for the estate.

Answer 3

I think she can write a total of $12000 per person per year without incurring gift tax. All she (or her authorized power of attorney) has to do is write the checks. There might be other considerations, like Medicaid limits to worry about as well; the law changed last February, so you should contact an attorney regarding your state if that applies to you.