Tuesday, April 29, 2008

Memorial Fund

Recently I had a coworker pass away. I'm not sure coworker is the right word, but that's all I can think of. Anyway, a bunch of us decided to create a memorial fund for his wife and unborn child. We wanted to make sure that they had enough money to get by until the baby was a little older and his wife could start working again. What I learned during the process is that each individual can give $12,000 as a gift tax-free each year. If you want to give more than that, then it will affect the limit you have on the dollar amount of the gifts that you give. The limit is $1 million dollars for your lifetime, and isn't affected unless you give more than the $12,000 to any one person. It is a combined limit, so if you gave $20,000 to three different people in one year, you would have an extra $8,000 for each person that would reduce your $1 million limit. You would then have $976,000 that you could give above and beyond the $12,000 limit before you would have to worry about the Gift Tax.

TurboTax has a good article about this.

The fund we set up is located here, if you'd like to contribute. Please read the information about Matthew.

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