Help Complex situation – any options?
Older gentleman
Age 78 years old –not married.
Poor Health – Uninsurable – Diabetes (both legs amputated) and other health problems – life expectancy less than 3 years, could be much sooner.
Assets – (approx $5.2 million net worth)
$3.2 million in IRA
$1 million retail investment account
$1,000,000 Primary residence (owned JTWROS with daughter but father paid for house – $875,000 – house 100% includable in his estate)
His daughter is his only beneficiary – she has 4 children
His daughter is his primary caregiver in her own home (father lives in the house with daughter and her family)
His MRD payments cover his expenses presently.
Any ideas to lessen the future tax consequences of his eventual death?
Thanks
Permalink Submitted by Al Fry on Sat, 2008-04-19 16:33
If he were to make large taxable gifts of high-basis property, the gift tax would be out of his estate if he lives three years. And any growth on those gifts would be out of his estate.
Permalink Submitted by Bruce Steiner on Tue, 2008-04-22 01:23
Things to consider include:
Roth conversion.
Providing for the daughter in trust rather than outright.
Leaving some of the (Roth) IRA to or in trust for the grandchildren.
This is not intended as legal advice. He should consult with tax/estates counsel, who can give him specific advice based upon his particular situation and his objectives.