The Receiving End of financial gifts
I post in another forum here quite frequently, but have a situation that made me come to this forum.
The other thread from a parent about tax free financial gifts got me thinking about our situation. We are on the receiving end of such gifts from my MIL. Currently, she gives us (and her other kids and grandkids) $10K per year as a tax free gift that is neither taxable to her nor us.
MIL was left quite wealthy when FIL died and she has a huge tax burden. In order to alleviate some of that, she is (with a financial advisor) looking for ways to gift her money to her kids while she is still alive. Apparently, NJ is notorious for taking their more than huge piece of the estate pie, at least they did in FIL's estate.
She told dh she is able to gift a one time $1M tax free. She was thinking gifting dh and the other kids an equal amount of that $1M. However, she is concerned about the tax burden it will put on us. Although we'd like to receive that kind of money (who wouldn't?!), we don't want to be put into taxation purgatory with such a gift. We are in AZ if that helps and she's in NJ, but looking to sell her home and retire to another state.
Of course, we have a good financial planner and would do some investments, but we are most concerned about the extra tax burden. With sound investment, we could set ourselves up for our future, but at the same time, who wants all that money to go to Uncle Sam?
Any ideas? Has anyone heard of this type of gift?