Money Transfer question

Factual Questions
1

Need help from any Dopers with inside secrets on banks.

My grandfather recently passed away. My parents and I are trying to figure out the lowest key way of getting my share of the inheritance to me.

See, my mom got her share of the inheritance and is going to pay taxes on it and all that. Now, she wants to split it with me. We are looking to transfer about $15,000 from her to me.

I’ve dug around online, and found out that the IRS will let one individual give up to $12,000 to another without needing to claim it on taxes per year, with a lifetime limit of one million dollars. And, since married couples count as separate people, both my mom and dad can gift me $12,000 each, or $24,000 total, without having to pay a gift tax. Awesome.

What we are now wondering is: At what point will the amount be large enough that the bank will flag the transaction and start delving into our personal stuff? There aren’t any big skeletons, we’d just rather be under the radar.

Thanks

2

At the risk of sounding like a cop-out, the answer is probably “I can’t tell you that.”

If they give you cash, the bank will file what’s called a Cash Transaction Report with the government if you show up with more than $10,000.

The tricky part is that there is also something called a Suspicious Activity Report that can truly be filed for any arbitrary dollar amount or payment method (cash, check, wire, etc.) if they have any reason to think you’re up to no good, and the bank is forbidden by law to disclose to the customer whether or not they file one. The putative reason for CTRs and SARs is to stop money laundering and financing of terrorist activities.

If you’ve been a regular customer with them for some time and one day show up with one $12,000 check to deposit, they probably won’t pay any attention. OTOH, if you start showing up with big checks every few days, that will attract their attention and may well trigger an SAR.

3

Don’t transfers of $10 000 or more get flagged?

4

That matches what we had heard. But we weren’t sure of the frequency. My mom is convinced that if we show up with a $10,000 check more than twice in one year, the feds are going to be tapping our phones.

If we space it out by a couple months, will we attract less attention? What if we do $5000 checks every month? Hell, I’d be happy to get $500 a month for a while.

I’m slightly concerned that my mom might burn through my share if I let her hold on to it.

5

Random thought.

Have mom buy a short term CD in yours and her name. When it matures, you cash it out.

6

That would be awesome, but I feel weird putting money into a savings thing while the $15,000 on my credit cards are all accruing interest at 19% minimum. The two cards at 26% are especially painful.

I guess she could send me enough to get rid of those two evil cards (both have balances less than $3000 each) and then get a CD with the rest.

What do y’all think?

7

6k would fall under a no interest family loan that wouldn’t raise any flags. Mom could write you a check with ‘loan’ in the memo. You write one back to her when the CD matures.

Disclaimer: I have no standing as an accountant or financial consultant. Please consult one before acting on any advice. Either mine or others.

8

You may be misunderstanding the cash transaction report issue. The bank is only required to report transactions in currency (or equivalents) more than $10,000. Currency, in this case, means actual greenbacks, very large piles of quarters, travellers checks that can be converted into greenbacks and the like. Transactions by check or wire transfer do not trigger a cash transaction report.

I don’t know much about suspicious activity reports, but banks routinely process checks in the tens of thousand dollars for personal banking customers without blinking. Checks larger than that routinely flow in and out of the accounts of even modest-wealth customers when buying a house or car, investing or liquidating investments, paying tuition, and all sorts of other things (including paying off credit cards). If banks were to report every time there were a couple of $10,000 checks coming or going in an account in a year, the system would be overwhelmed with reports.

And besides, if the transfers are within the gift tax minimum for a transfer from a married couple (and the $12,000 per year minimum doesn’t count against your lifetime exemption), then it doesn’t matter whether the government investigates, because it is a perfectly justifiable transfer. Going through other machinations about how to do it might raise red flags that just writing a check would not.

Note that this is a general discussion of the law and banking procecure and I do not represent you or know the particulars of your situation. If you have questions, please contact your own attorney or qualified professional.

9

I am not understanding the basic issue. You are not dealing with a truly large or unusual amount of money. Banks in even poor areas deal with much larger amounts every day. The reporting requirements are real but they are for reference only in case something like drug dealing or money laundering needs to be investigated if need be. You say that you have no legal issues so that would be that in my mind. You may be under the misconception that what you are doing is rare and it is far from it and it is completely legal to boot. Lots of people have to move around tens of thousands of dollars for various reasons and even a bank cashier with one hour on the job won’t blink an eye even if they have to fulfill the reporting requirement. It is small potatoes although you are wise to0 beware of the yearly gift limits because those can have tax consequences if it isn’t executed properly.

10

Thanks for the input, everyone. I had a feeling that my mom was overreacting. It’s a large amount of money for us, so we were worried.

Thanks, I think I’ve got my questions answered.

11

A couple more randomizational thoughts and then I’ll be off.

A. Open a joint checking account instead of a joint CD. She’ll deposit whatever amount there is and you’ll have access to it to pay whatever bills you need to.

B. If your intent is to immediately pay off credit cards, she can write the checks and pay them off for you. The card companies don’t care where the money comes from. She can then write you a check for whatever amount remains. About 9000 based on the numbers you submitted.

12

I am in Nigeria, and we have our ways… :cool: :smiley:

13

Nitpick: Currency Transaction Report.

A bank would never file a SAR for a large check, although an atypically large check might warrant a hold on the funds. An SAR is usually filed if the customer frequently makes cash deposits of, say, $9990. If they balk when the teller asks for info to file a CTR, and the customer takes back part of the money to avoid filing, that would be a serious red flag.

14

Sorry to hear about your grandfather, Pullet. Were you close?

15

Bah, you’re right. It’s been a while since I’ve actually filled one out, and it was before the government added the anti-terrorism angle.

However, most other countries are still only interested in large piles of cash, and name their forms accordingly.

16

There may be a better way. Talk to the estate lawyer handling the will (or consult with one), and ask if your parents could decline some or all of their inheritance and pass it to you. (IANAL, I don’t even play one on TV.)

17

Thanks, kaylasdad99. We weren’t especially close. My mom didn’t like him very much, for fairly good reasons, so we moved across the country when I was little.

His death is sort of a weird tale, actually. He had been a smoker for years and had only just stopped drinking. He had diabetes for a long time and had recently dropped a lot of weight. So, at 70 years old, he wasn’t in the best of shape, but was well enough to stay in his own house with family close by to check on him.

One day I get a call from a cousin, telling me he had died.

In a house fire.

Apparently, this is what happened:

He fell asleep on the sofa with a lit cigarette. At some point, he moved off the sofa into bed, but the embers kept going. A neighbor walking down the street saw the sofa in flames and called the fire department. They come, get Grandpa out of the house, haul the sofa out into the snow and put it out.

He was fine, if unnerved.

A few hours later, my uncle gets a call from another panicked neighbor. The house is well and truly in flames now. Some embers from the flaming sofa must have sunk into the carpet or the wall where the fire crewed missed them. Grandpa had gone back to sleep in the back bedroom, which was untouched by the flames, but full of smoke. By the time anyone realized what was happening, there was no saving Grandpa.

As for the will: My mom had told me for years that he wrote it such that everything would bypass his own children and go straight to the grandkids. Not a lot of love on this side of the family. When the inheritance check arrived to my mom, she phoned up and casually mentioned it and all the ways she was planning on spending it. Helping me with my credit cards was on the list, but after the $8000 matress and the new computer and some other stuff. Hence, my concern.

But, after talking with my Uncle, who has been dealing with my Grandfather’s estate directly, the will in fact says that everything goes to my Grandfather’s kids, my mom and her siblings, not the grandkids. So, I don’t care much anymore. If she feels like sharing with me, awesome. If she wants to blow it all, her choice.

Good to know that, should she want to share, we don’t have to deal with taxes or phone taps.

18

I agree that you should just have Mom pay off the credit card when the money gets transfered to her account. Easy Peasy!

19

Can’t you just deposit the money… and if anything happens, say that you just recently sold a car, or an old comic book collection?

20

Because, if the bank was suspicious, it would be easy to check a something like that. Look up a transfer of title at the DMV, or call around to the local comic shops.

Besides, my mom is unlikely to give me more than $10K at any one time anyhow.

If she decides to send me money, I probably will have her pay my credit card directly.