Gifts of up to $12,000 per person per year are not taxable. So my parents would have to get theirs in installments.
In Canada there would not be any tax consequences for giving gifts.
I have often thought about what I would do with the winnings of the lottery that I don’t actually play. If I won a lot of money, say 3 million plus, I would give away a fair chunk away quickly before I got too used to having it. Anything less would be tougher as I would really have plans for that money. Still I would help out a friend or family member in need, and still send them some very nice gifts.
If I won big, I’d do the usual trips and stuff, then I’d buy land and start my dream house and my business a little earlier than expected. I’d also give to family members and such.
I think the biggest thing would be donating to social programs that help the homeless reintegrate themselves, that help ‘youth at risk’ turn away from violence, that help the mentally ill decome healthy, that help families repair themselves and put themselves on better paths.
These are the sorts of issues whose root causes absolutely must be addressed, or society as a whole becomes poorer and more violent, and less able to cope with external problems, and thus less able to survive. I am so sick of people saying that all we need to do is increase policing. Of course people need to take responsibility for their own actions, but if you only have a hardline police response, all you’re doing is slapping a bandaid over the symptoms of decay when the wound in society is still bleeding below.
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I keep hearing stories about how all those people who won ended up bankrupt. As horrible as this sounds, I’d probably set up trusts & 529s for the kids college, fix up the heck out of our house, and do my best not spend my family into the poor house.
I would quit my job and I would throw a party at a Hall somewhere (I’ve always wanted to buy champagne by the case for a party) and either have shuttle-buses to take people home or make staying over in rooms mandatory. But its one party and it would probably cost about $20k sum total (think wedding reception w/o the monkey-suits & ‘electric slide’). I’d still tip 20% though.
My SO and I have a standing joke with our friends. If they ever get an email or a phone call that says “Send me a dollar”, they send a dollar, and don’t ask questions.
We’ve gone over the how do we hand out money without paying huge gift taxes on it question. The answer is, any ticket that hits it big was a group purchase. Our friends/family get a X% stake, straight from the lottery, we get the rest. The dollar in the mail is their annual contribution to the ticket fund.
#1) Fund our own retirement
#2) College funds
#3) $100kish amount to friends, to cover a big chunk of the mortgage, or other uses if they have that paid off already
#4) Big party/vacation, someplace cool, with all expenses paid. A private tropical island sounds about right. 100 of our closest friends and family and all the margaritas you can drink.
I thought it was 10k but I’ll assume you are right. The recent dust up in New Jersey about our Governor involved a bunch of gifts he gave his exgirlfriend. On a $450,000 gift he had to pay something like $150,000 in gift tax. Seems a bit excessive. It helps that he is a billionaire.
If it was a big win, like $20 mil, I’d set up trust funds for certain friends. As for family, my sister would get enough to set her up for life. My parents would probably not accept any money since they live completely satisfied materially. So I’d be taking them on very nice vacations regularly. And I’d have enough set aside for whatever health issues might someday arise.
As for more distant family, I’d probably not let any of them even know about my cash. If they did find out, I know they’d be all over me. At least, the ones least deserving would be. My answer to that would be, “There is $X in a trust fund. All you have to do to claim it is get a Masters Degree in any field you want.” That would clear out the druggies and their families and maybe help some of the derserving ones.
Moderating isn’t fun enough?
After I paid off debt and bought whatever the wife and I needed, I figure I’d become a Venture Capitalist. I’m not going to give money just to give money, I want to give money so people can become what they want. I’d start w/ my sister’s, I’d tell them to come up w/ a business plan (they both have small businesses/organizations they’d like to start) and then give them 10% more than what they needed. All I’d ask in return is a small paying position on their board of directors (or whatever). I figure that once I collected 10 or more of these small paying positions, it really wouldn’t matter if my winnings went away, I’d still have a good income (as long as the businesses kept going).
I didn’t win the lottery but I did receive a decent insurance claim, near six figures. I spread it around to family and friends. Trips, straight up cash to immediate family and friends, and paid off some of my loans. I now have about 15% left which I’m saving for a house. I was amazed at how fast that money went. Half of it was gone after paying bills, money to family and friends, and a couple trips.
Razorette and I made a pact years ago – if we ever win $1 million or more, one-third will be given in cash to our two sons, one-third to our parents, and we’ll keep one-third (after taxes, of course.) Since then, some things have changed. My wife’s parents pocketd almost a mil from the sale of the family farm, and her mom keeps giving us wads of cash for birthdays, Christmas, etc.; my mother has passed away, leaving my father a substantial sum she had inherited; one son is married to a corporate executive who makes six figures (she paid cash for a new pickup for him on his birthday) and the other son is in the Navy, living on his wife’s restaurant-manager salary and stashing his quite-respectable monthly paycheck in mutual funds.
We’re re-thinking the whole one-thirds policy.
But certainly, if we ever fell face-first in to a pile of unearned cash, we’d be spreading it around like drunk sailors on a Cinderella liberty. Family and friends would get gifts whether they wanted them or not.