My mother is 77 years old. She has CD's in both her name and her grandchildren. She wants to transfer the CDs to the grandchildren so they can cash them in. The lawyer said that the grandchildren needed to wait five years to cash the CDs. She said if the CDs were cashed now there would be a penalty if my mother went to a nursing home within five years. Is this the only risk involved in cashing the CD's now?
I do not contradict the advice from a reader's attorney as a general rule. The attorney has all of the information at hand, understands the local jurisdiction's laws, and has an attorney-client relationship with the reader.
This letter is a good example of why I have this rule.
The date the Certificates of Deposit (CDs) are redeemed seems irrelevant to the $13,000 gift tax annual exclusion. The only reason I can think of why the attorney would advise the grandchildren to not redeem the CDs immediately is they may have a five-year maturity and the grandchildren may lose the interest by doing so.
However, I am not your attorney, nor do I have all of the relevant information at hand, and because you did not mention your mother's state of residence I do not know which state laws to apply.
Therefore, I urge you to ask your mother's attorney for clarification of his earlier statement, and why redeeming the CDs has any relationship to your mother living in a nursing home.
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