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The Basics -- 5 cardinal rules of college gift-giving - MSN Money MSN Home My MSN Hotmail Shopping Money People & Chat Sign In W eb Search: Money S earch MSN Money: Help Home News Banking Investing Planning Taxes My Money Portfolio Loans Insurance Planning Home Retirement Savings Insurance Family/College College Tools Scholarship Search College Search Resources Decision Centers Commentary Index More Tools Related Links Message Boards Print-friendly version Send this to a friend Save for College Go to Step by Step A R T I C L E S Understanding the true cost of college Strategies to meet your college savings goal How to set up your child's college fund Small investments that yield big education dollars 5 cardinal rules of college gift-giving The best way to save for college An investment plan tied to yourchild's age Tax-savvy ways to fund college education Advertisement The Basics 5 cardinal rules of college gift-giving There are many ways, such as gifts and trusts, to help your family financially. But you should know the rules to protect yourself and your loved ones. By Adriane G. Berg Rule No. 1: Decide if you really want to make a gift There are consequences associated with gift giving, so think about what youre trying to accomplish. Dont transfer ownership and control over money without intending to do so. Once a name is changed on a deed, bank account or security, you have relinquished ownership of that asset. Even if you have placed the assets in a joint account, a creditor, spouse or other person named in the account can seize all of the money. Be careful. If you need help in handling money use a power of attorney, don't make a gift. Dont use custodial accounts if you think you'll need the money. The most frequently used form of gifts to grandchildren is the Uniform Gifts to Minors Account, the UGMA, or the similar Uniform Transfers to Minors Account, or UTMA. Although the assets are held in custody until the child reaches adulthood, the money belongs to the child. You cant take it back and the child gets the money at ages 18 or 21, depending on the child's state of residence. Make sure the gift is complete. For example, a deed with two names "in common" sets up only a half ownership. If one person dies, the other person does not necessarily inherit the remainder. Placing a grandchild's name on a deed beside your own does not guarantee that the child inherits the house. The child gets half ownership; the rest is distributed according to the law of intestacy for that individual state. Rule No. 2: Know how to title the gift The title on a bank account, stock, bond or deed creates wide differences in legal rights. A joint account transfers funds completely. Creditors, spouses and gift recipients can get all of it. Accounts that are Payable on Death (POD), and In Trust for Accounts (Totten Trusts) are not gifts. They are revocable transfers that pass without probate upon the death of the donor. Custodial accounts, such as UGMAs and UTMAs, transfer property irrevocably and with no strings attached. The custodian manages the account, and funds can be added to it. All of these types of accounts are considered the child's when it comes to determining eligibility for college aid, except POD and Totten Trusts. A true trust sets up a legal structure that the Internal Revenue Service taxes separately from yours or the recipients income. When a person receives funds from the trust, that person then pays the taxes on those funds. Trusts offer a great deal of flexibility. You can put restrictions on gifts held in trust. For example, there can be investment limitations or you can say the funds can be used to pay only for a grandchilds college, or that the funds can only be distributed after he or she reaches a certain age or once theyre married. Rule No. 3: Understand the tax consequences of a gift A child under the age of 14 is taxed on investment gains at his or her parents' highest marginal tax bracket. The so-called "kiddie tax is imposed to discourage transfers as a way to lower your tax bill. However, children under 14 get an exemption from taxation of investment gains of up to $1,400 a year. The bottom line: If income tax savings is your goal, transfer just enough to generate no more than $1,400 in returns each year. When the child reaches the age of 14, transfer more, unless the gift disqualifies the child for college aid. The donor is taxed for gifts. Be sure you follow the rules to get a gift tax exemption: You can transfer up to $11,000 per person each year without the recipient paying a tax or even reporting it on a tax return. Married couples can transfer up to $22,000 per beneficiary gift tax-free. If college is upon you, you can give an unlimited amount of money and pay no taxes if the gift is earmarked directly for tuition or other college fees (although not room and board). You can also pay the medical expenses of a beneficiary in unlimited amounts, if payments are made directly to the medical institution. If you must pay a gift tax, file on the April 15th after the year the gift was given. Gifts over the $11,000 to $22,000 rule are subject to a gift tax based on their fair market value at the time the gift was made. The usual procedure is to file a gift tax return and use all or a portion of the lifetime $1 million exclusion that we each get for gifts and inheritance. (The exclusion bumps up to $1.5 million in 2004, $2 million in 2006 and $3.5 million in 2009. In 2010, the gift and estate tax are to be repealed. The Republican-controlled Congress may try to accelerate these changes.) Rule No. 4: Know the best strategy to maximize the gift. Will you give now or later? If college planning is the goal, you may want to start immediately. Be sure that you don't use property that qualifies under the stepped-up basis rule. Known as SUB, it allows property such as your home to be appraised at its fair market value upon your death, rather than what you paid for it 20 years ago. So, if you have some highly appreciated property and transfer it during your lifetime, your family will end up paying more in taxes. You are depriving the family of this handsome tax benefit. If you need to give money right away, liquidate non-appreciated property or get rid of your losers. Or you can keep the asset in your name and take a loan against it to make the gift. Will you give outright or in trust? The 2503 C trust, sometimes called the child's trust, allows you to hold the gift in trust until the child reaches age 21, and get the $10,000 gift tax exclusion. If the child dies before reaching that age, the money goes into his or her estate. The money cannot be used to discharge a legal obligation of the donor. College is not a legal obligation. Interestingly, if the grantor/grandparent reserves the right to get income from the trust, the IRS considers the grandparent the owner for tax purposes. In that case, the gains are taxed in their bracket. Family limited partnerships have been around since 1910, and have enjoyed a recent resurgence. If you like the idea of a trust, but want to control the money and investments yourself, consider transferring the gift to a partnership. You act as general partner and the children or grandchildren are limited partners and recipients. Their tax bracket is applied to gains, and you can distribute the funds when needed for college or other purposes. The gift is out of your estate and even better, the gift is subject to IRS gift tax discount tables. In that way, you can transfer more than $1 million free of estate and gift taxes over the next few years. Rule No. 5: Understand the family impact of your decision Although the rules of gifting are technical, the act of giving can be very emotional. Giving a gift to one family member in need may anger another family member, even if that person is financially affluent. A few devices can help smooth family tensions, or at least stave off future legal battles. The advancement clause in a will asserts that gifts given during your lifetime are an advance against a future inheritance. This allows you to give, or advance money to one relative today, and have your executor "even out the score," after you are gone. For example, if you give Grandson John $10,000 for tuition and give Granddaughter Sally nothing, you can still leave the two of them a total of $50,000 in your will. But since John already received $10,000, he gets only $15,000 upon your death and Sally gets $25,000. What if you intend to favor one family member over another? You can forestall a legal fray with the "in terrorum clause." That clause asserts that in the event that one relative is disgruntled, any attempt to attack the will or trust results in a forfeiture of inheritance rights. Few heirs fight for the principle of the thing. Resources Read/Post comments on the Your Money message board Find a problem in this article? Send us e-mail Free Newsletters! Search MSN Money tips © 2005 Microsoft MSN Privacy Legal Advertise Feedback Help

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Creative Groomsmen Gifts - Gifts BW gifts | gifts Resources | Add URL Wine Gifts & Baskets From the casual wine drinker to the serious enthusiast, we have a gift that will make them smile. Our selection includes premium wine, gourmet baskets, distinctive champagne sets & the very finest California and Northwest wines. Creative Groomsmen Gifts Articles Party Goods and Decorations Suppliers of party goods and decorating suppliers such as streamers, plates, hats, cups, theme party packages and more. Also party favors....( Continue Reading ) Site Map for the about.com guide to weddings [A site map to everything you wanted to know about weddings - from engagement rings to wedding dresses to thank-you notes for wedding gifts.]...( Continue Reading ) Who Pays for What? A Guide to Figuring Out Who Will Pay for What at Your Wedding You have a dream wedding planned in your mind, but do you know who?s going to pay for what at the wedding? Traditionally, the bride?s family would pick up the tab but with the average cost of a wedding skyrocketing, and more couples getting married...( Continue Reading ) Arts and Crafts for Sale, Quilting, Jewelry, Painting, Everything Handmade See tons of handmade crafts for sale on this frequently updated page!...( Continue Reading ) Creative Groomsmen Gifts Directory Links christian gifts for children graduation gifts law school best electronic gifts nautical gifts irish gifts unique wedding gifts ideas gifts for a new mom recipes for gifts in a jar ideas for homemade christmas gifts teacher thank you gifts wholesale garden gifts white house gifts gifts for music lovers good valentine gifts gifts to us hallmark cards and gifts good gifts for girlfriend gift baskets dallas cute valentine gifts gifts for 30th anniversary cotton anniversary gifts siamese cat gifts belated birthday gifts male birthday gifts spiritual gifts survey valentine gift baskets send gifts to uk gift baskets california baby birthday gifts perfect wedding gifts christmas gifts for children gifts for babies pa gift baskets best gifts for men carol wright gifts good anniversary gifts travel gifts inexpensive gifts corporate matching gifts inexpensive christmas gifts sentimental gifts for men wholesale gifts e gifts horse racing gifts cellini fine gifts Popular Search Terms: Gifts BW © 2004 Gifts BW All trademarks are the property of their respective owners. All Rights Reserved. This site is not related to Brajeshwar or Brajeshwar.com in anyway, shape or form

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Bridal Showers - Pre-Wedding Parties Front Page - Features Unique Wedding Ideas Wedding Forum Ask Fran Customs & Traditions Wedding Etiquette Planning Your Wedding Wedding Planner Honeymoon Checklist Local Wedding Vendors Punch Recipes Who Pays for What Mother of the Groom Mother of the Bride Maid of Honor Best Man Thank You Cards The Invitation Honeymoon Checklist Discovering The Past Around The World Engagement Customs Pre-Wedding Party Bridal Showers Choose Your Gown Ceremony Timetable Wedding Survival Kit Calendar of Events Children in the wedding Customizable Wedding Planner Infant Specialties Contact Us Advertise Wedding Vendors - get listed . All Accessories Wedding Invitations Bookmarks Cake Servers Cake Tops Ceremony Essentials Coasters Decorations Favors Garters Gifts Thank You Notes Reception Essentials More The Music of William Jenks Classical Guitar music perfect for your wedding. Free Downloads - Click here OurMarriage.com Home > Planning your wedding > Pre-wedding parties > Bridal Showers Pre-Wedding Parties The Bridal Showers The Bridesmaid Luncheon The Bachelor Party The Wedding Breakfast The Bridal Brunch The Rehearsal Dinner Bridal Showers Traditionally, bridal showers are given by the maid/matron of honor, or close friend of the bride. It is not proper for an immediate family member of the couple to host the shower . To do so, would appear they were asking for gifts and is not in good taste. The party itself may be scheduled at any time convenient for the bride and her hostess, although the last week before the wedding is considered poor planning. There are so many last minute details, that a shower would likely be more stressful than joyful. Showers are known as parties with a purpose. The purpose of a shower is to assist the couple in equipping their new home or for the bride to assemble a trousseau. Showers today, often surround a particular party theme. Recipe showers, kitchen showers, bath showers, lingerie, linen and garden or camping showers...the possibilities are endless. As might well be expected, kitchen showers have long been the most popular shower theme, because of the endless range of paraphernalia every newlywed couple needs to set up housekeeping. Novice cooks, especially those who have never kept house before, need everything from pots and pans to mops and brooms. One variation of the kitchen theme has each guest including their favorite recipe, along with an item needed to prepare that recipe. As an example, a flour sifter or hand mixer with a cake recipe. Muffin tins alongside a recipe for pop overs. Rock salt, when giving an ice cream maker. Use your imagination. When requesting favorite recipes as part of the shower planning, it is a good idea for the hostess to send uniform, ready to use, recipe cards in the invitation. A recipe box is then given to the bride during the shower, to begin assembling her favorite recipes. Lingerie showers are a favorite of the bride, especially when she is honored with more than one party. Long, frilly, sexy nighties, baby doll pajamas, lacy bra's and panties, one piece body huggers, are all terrific ideas for gift giving. Sewing accessories, closet or drawer organizers, certificates for special services, such as beauty treatments, hair care products or nail enhancement are also perfect gifts given at a lingerie shower. It is the job of the hostess to plan a party that compliments both the theme and her guests. Be sure when several showers are planned, the guest list is different for each one so no one ends up feeling obligated to attend and buy several shower gifts, as well as a wedding gift. When the bride lives in a small town or community it is considerate to suggest people join together to host one shower, rather than several small ones. Showers are almost always informal gatherings with a simple menu and often only include cake, mints and punch. The hostess issues invitations by telephone, mail, or in person. It is considered in poor taste to invite people who do not personally know the bride, although, they may be friends of her family or fianc. However, etiquette for the 90's allows exceptions to every rule. A shower may be the time, chosen by the mother of the groom, for instance, to bring family and close friends to meet her prospective daughter-in-law. Showers are not times to call in social obligations. During the shower, games are played for fun and entertainment. You can find notebook style, pads of games to play at your local card shop or dream up your own. Ideas include, a small basket of kitchen utensils with 15 to 20 items, shown to the guests for 30 seconds, then removing the basket and asking them to write down everything they remember seeing. Writing the full, soon to be married name of the bride, across the top of a page, and seeing how many words can be made from the name in four or five minutes is another popular choice. Of course, in both instances, the person with the highest number wins the prize. Be sure to have a couple extra gifts on hand for those times when two or more are the winners. It is also fun to give each guest a clothes pin, to clip on their lapel, with instructions they are not to cross their legs during the party. If caught crossing their legs, the person catching them, gets their clothes pin. The one left holding the most pins at the end of the party, wins a prize. One further point needs to be made concerning the guest list for a shower invitation. The thoughtful bride, who has planned a formal wedding, also sees to it, if possible, that people not invited to the wedding, are not put in the position of being invited to a shower. Every guest will bring a gift. It would be in very poor taste to ask someone to bring a gift for a bride who has not chosen to invite that individual to her wedding. Traditionally, shower gifts are smaller and rather less expensive than wedding gifts. As a courtesy to family and friends, it is a good idea for the couple to register their preferences in the gift registry department of their favorite store. If you have ever tried to decide on just the perfect gift for someone, and didn't have a clue as to their likes and dislike, you will understand the thoughtfulness of a gift registry. Be sure to include small, inexpensive items, such as kitchen towels, wooden spoons, or hot pads, as well as larger items, such as blenders, toasters, bread makers, and coffee machines. Elderly guests may be on a fixed income, and a very limited budget, but also appreciate knowing the gift they buy is something truly desired and appreciated. Thus, the purpose of registering small, inexpensive items. And last, but hardly least, a mention of sending thank you cards, (also see "How to Write a Thank You Card") must be included in our discussion of bridal showers. At one time, notes were not considered necessary when you thanked someone in person. Today, with showers being larger and guests busier, a personal note is the only way to make sure sincere appreciation is expressed. A unique idea for sending thank you cards begins as the guests arrive and register for a door prize by filling out her name and mailing address on "thank you" envelopes. The door prize winner is drawn at the end of the shower from the envelopes which are then given to the bride. This enables the bride to more quickly send out her thank you cards, and eliminates returns due to incorrect addresses. For more information on this and other related topics see Ask Fran OurMarriage.com Home > Planning your wedding > Pre-wedding parties > Bridal Showers OurMarriage.com respects your privacy. 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