dad will be gifting me $20000 and putting the same amount in a trust for my estranged sister . gift letter will be drafted and signature witnessed by attorney. future result is we both receive same amount when he is gone , should i worry a future estate challenge what is n y law on this ?
IRS does have a limit in what you can gift before taxes are involved.
Annual Exclusion: You can give up to $19,000 to as many people as you want every year tax-free. If you are married, you and your spouse can combine your exclusions to gift up to $38,000 per recipient. [1]
Exceeding the Limit: If you gift more than $19,000 to a single person in a year, you must file IRS Form 709. However, you won’t actually owe any gift tax unless you exceed your massive $15 million lifetime exemption. [1, 2]
Exceptions: You can make unlimited gifts without using up your annual exclusion if you pay for qualified medical expenses or educational tuition directly to the institution. [1]