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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 ?

20k is a silly amount as it puts all of you right over the limit for un-taxed gifts but the real questions are: is your dad of completely sound mind and this was his idea? And is there any chance he will need Medicaid.
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Reply to Slartibartfast
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If Dad is of a certain age and may need Medicaid within the next 5 years, gift giving and setting up a trust might cause penalties. Meaning, he can't get Medicaid during the penalty period. Someone will have to care for him.

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]
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Reply to JoAnn29
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Ask the attorney.
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Reply to JustAnon
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What type of attorney is this? An elder law attorney? This is who you should be asking this question. Does this attorney practice in NY state? You need to discuss Medicaid impact with an elder law attorney first.
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Reply to Geaton777
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Is there a possibility that your father will need Medicaid-funded long-term care in the next five years? If so, he would be penalized for gifting you this money now.
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Reply to MG8522
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