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Gifting and Your Will: Introducing The Make It Legal Podcast

We’re trying something new this week at Rocket Lawyer and we’re really excited about it. After having so much fun making the past 21 episodes of the Rocket Lawyer Podcast, we’ve decided to branch out and create a brand new weekly show, the first episode of which you can find below. The idea is simple: on the Make It Legal Podcast, we’ll be talking to real lawyers every week, finding out what you need to do to make it legal. We’ll be soliciting questions from you, our readers, and posing those questions to legal experts, all in the interest of learning how best to navigate the legal issues you care most about.

In keeping with our Make A Will Month theme, we contacted Randy Coleman, a Florida-based estate planning attorney for our first inaugural episode. In the coming weeks, we’ll be covering probate and marriage. Do you have any legal questions about either issue? If so, please send us a message , drop us a line on Facebook, or toss it in the comments below. We’d love to hear from you and we’d love to help.

Below the player, you can find a short summary of what we discussed. We hope you enjoy.

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00:00- Introductions. Charley introduces the brand new Make It Legal Podcast and Randy Coleman, an estate planning lawyer who writes what we think is one of the best blogs on the subject.

2:35- Randy starts us off by explaining how best to pay for long term care. Basically, there are three options: personal finances, long-term care insurance, and Medicare, the later of which he classifies as a “last result.”

3:55- Charley wonders if wills are really the best way to leave gifts. What about gift giving while you’re still alive? Our expert agrees there are some significant advantages to that approach. For starters, you get to see your loved ones actually use the gifts. You’re also taxed less, as the estate tax tends to be much higher than a gift tax.

5:49- Justin wonders if he can give gifts to anyone he wants (like gifting his books to Val Kilmer) and, if so, what happens if that gift is rejected. We learn there is no limit on what you can give, though there are meaningful tax consequences, of course. Charley doesn’t think Val will take this gift, and Randy explains what would happen next: either the gift goes back into the estate or falls under the laws of intestacy, which vary by state. The take away: it’s important to make sure that your gifts will be accepted, if at all possible.

8:03- Are there different rules when gifting to an individual as opposed to an organization? Certainly, says Randy. The most significant of these is that a gift to an individual is taxable (either via the estate tax or gift tax), while a gift to a charity is actually tax deductible. Furthermore, there are a few different ways to gift to a charity: an annuity, a deferred gift (such as a trust), or an outright gift (like a lump sum or a work of art).

10:47- While discussing taxable trusts, Randy mentions that during your life, you can give $13,000 a year to as many people as you choose. Charley recalls a story of a millionaire giving his money away to random folks on the street; in retrospect, I have to say I regret not being on that street. We also learn that the estate tax is historically low at 35%.

13:27- What about creditors? Do they have a right to your gifts before your beneficiaries? This is another issue where it’s best to consult a professional, but each state has it’s own set of rules. For example, in Florida, life insurance, homesteads, and retirement accounts, among others, are exempt from creditor claims. Randy tells us its important to keep these gifts from lapsing into your probate estate. To do so, he recommends carefully choosing both your primary beneficiary and contingent beneficiary carefully.

We’d like to thank Mr. Coleman for his time and expertise and, if you’re looking for an estate planning lawyer in Florida, you should certainly look him up. If you missed Charley and Juli’s discussion with I. Nelson Rose regarding the recent seizures of online poker domain names, we recommend checking that out as well.

As mentioned above, we’d love to hear your questions about probate or any legal quandaries about marriage. Feel free to leave them in the comments or contact us directly. We’ll be bringing in lawyers to discuss them and we’d love to give you some answers.

Thanks for joining us!

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