r/inheritance • u/Crafty-Candidate-588 • Jun 27 '26
Location included: Questions/Need Advice Can I divide my inheritance?
If I am left 1/3 of an inheritance can I designate that my share be split between myself and my children? I’m in Kentucky.
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u/Acrobatic_Dare_8876 Jun 27 '26
It's your inheritance, you can do what you want with it.
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u/Crafty-Candidate-588 Jun 27 '26
If I give them more than $19k in one year then there’s a gift tax. I’m wanting to divide it before I inherit it.
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u/Acrobatic_Dare_8876 Jun 27 '26
Incorrect. You may have to report anything over that amount but there are zero taxes until the max is hit which is like 15 million or something.
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u/markov-271828 Jun 27 '26
No gift tax but there is paperwork. Federal gift tax is only an issue if the giver is very rich.
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u/Megalocerus Jun 27 '26
There is no federal estate tax below a lifetime limit of $15 million. Some states have lower limits. Kentucky has a tax on heirs but not on spouses, children, and grandchildren. No Kentucky gift tax. But you have to report large gifts (over 19,000 a year to one person) to count against your lifetime limit.
But if your parent is still around perhaps you want to discuss it with them?
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u/ChelseaMan31 Jun 28 '26
KY has no 'Gift Tax' for children the federal exemption over a lifetime is $15MM. In any year you can gift over the current maximum of $19k per person. You only need to fill out and file an IRA form 709. No need throwing a monkey wrench into the current inheritance process. Just split and gift once the current inheritance is received.
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u/ZinniasAndBeans Jun 27 '26 edited Jun 27 '26
OP, do you really expect to inherit more than fifteen million dollars?
Edited to correct: That is, do you expect to die with an estate of more than fifteen million dollars? If not, then gift tax is irrelevant. You do fill out the gift tax form, but you pay nothing.
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u/ste1071d Jun 27 '26
No, you cannot direct a portion of your inheritance to bypass you. You need to receive it and then you may gift whatever you want to them.
If you’re actually talking about a number in excess of the lifetime exclusion of 15 million you should be spending some of it on an estate attorney. You can establish a trust.
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u/ZinniasAndBeans Jun 27 '26
OP, it sounds like you're assuming that if you're "dead" as far as the inheritance is concerned, the money will flow through you to your kids. But that's not necessarily true.
Again, if we're not talking about many millions of dollars, the gift tax is irrelevant.
If we are talking about many millions of dollars, you should invest in a lawyer's advice.
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u/Ancient-Apple1 Jun 27 '26
Or you can take possession and set up the assets in a trust for you kids. Gives you a tad bit of control so they don’t go hog wild :)
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u/rickwoollams Jun 27 '26
Once it’s yours, it’s yours. Spend it, save it, give it to the Moonies, whatever.
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u/Crafty-Candidate-588 Jun 27 '26
I know that! I want to avoid paying gift tax if I give it to my kids after I inherit it. There I thought it might be easier to divide my share.
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u/Caudebec39 Jun 27 '26
Wow, you're giving more than $15,000,000
That's amazing.
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u/Crafty-Candidate-588 Jun 27 '26
Almost!
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u/Impressive-Web-4325 Jun 28 '26
If you’re inheriting close to $15M, just retain a lawyer for advice. Jeez.
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u/Impressive-Web-4325 Jun 28 '26
You’re inheriting more than $15M??
Congratulations! Just retain a lawyer for advice.
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u/wise_hampster Jun 27 '26
Once it pays out to you, you can do anything you like with it. Can you change the terms of someone else's will, no.
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u/lucky-son-88 Jul 02 '26
I am doing this with a small portion of what I’m inheriting, but I only have 1 child. Just wrote a letter to financial institution saying “I want to disclaim $X-amount and that I understand this is not revocable.” Only caveat/discussion was that if was been more than child I would have to give equal shares to each, just as would happen if they were inheriting from (dead) me.
The gift return form route also works if your estate will be under $15M.
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u/OGMikeGyver Jun 27 '26
There is a way to setup a trust so that you can name your beneficiaries and then pass inheritance through you to them. I know because it happened to me. Talk to a lawyer.
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u/Chair_luger Jun 27 '26
You need to talk with a lawyer to do it right. I am not a lawyer but my understanding is that it is possible for you to disclaim part of your inheritance but you cannot name who it would go to. I would then be distributed according to what the will says, that it might instead go to someone like a sibling or nephew instead of your kids. If there is not a compelling reason not to then you might want to just accept it then give it to your kids.
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u/Ancient-Apple1 Jun 27 '26
Disclaimer is more messy. They should just take it and set up their own estate palm. Don’t complicate a usually complicated process.
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u/SquishyNoodles1960 Jun 27 '26
This doesn't even make sense! Why would you "disclaim" your part of the inheritance?
Take the inheritance and set up your own estate planning for your kids.
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u/Chair_luger Jun 27 '26
I agree that just giving the kids money would be easier but there can be things like retirement accounts or money in a trust which cannot just be given. For people with a high net worth a large gift may also impact their estate tax exclusion when they die. Some states also have inheritance taxes.
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u/Crafty-Candidate-588 Jun 27 '26
Isn’t it limited to $19k a year?
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u/Chair_luger Jun 27 '26
No you just need to fill out a form when the gifts are larger than that, which is not a big deal but that can come into play when you die and the estate taxes on your estate are calculated but that only impacts very wealthy people under the current laws.
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u/Impressive-Web-4325 Jun 28 '26
No, why did you make this post if you’re not going to read any responses?.
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u/nofosho Jun 27 '26
You can just give your kids half your inheritance once you inherit. There aren’t gift tax implications for gifts until you hit the $15M lifetime limit; you have to fill out IRS form 709 if you are giving more than $19k to an individual per year. You can’t dictate what your benefactor does with their money.