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AlexiaEsq.
AlexiaEsq., Managing Attorney
Category: Estate Law
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Experience:  19+ Years of Legal Practice in Estate Law.
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background - estate 1.5mil and a house worth 180k my husbands

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background - estate 1.5mil and a house worth 180k
my husbands mom passed last year; his stepfather passed last month
when mom passed, stepfather changed WILL leaving a friend Executor, my husbands sister and niece to split 2ways (750k each) and quick deeded house to sister. Both sister and niece agreed to split 3-ways (500K) to include my husband becuz if mom had passed last, she would have made son executor and split 2ways between siblings - sister and brother (my husband)

QUESTION/Dilema

1)executor/attorney told sister and niece they cannot split with brother becuz he is not in the will. is this true?
2)if sister/niece each give 250k to brother (=500k) making each end with 500k, are there tax implications for brother since it is not technically inheritance written in the will?

2)sister wants to quick deed house to brother, can they do this without tax issue for brother? it was just quick deeded to sister.... with no problem so can they turn right around and quick deed to brother..then brother assumes all ins, property tax, etc..

3) house 180k..1/3=60) if brother gets 500k, he wants to give each back 60k for their portion (1/3) of the house.. then what is left put in current Fidelity and Vanguard accounts...are there tax implications?
Submitted: 1 year ago.
Category: Estate Law
Expert:  AlexiaEsq. replied 1 year ago.
Hi, my name is XXXXX XXXXX I thank you for your inquiry. I have been practicing Estate law for 19 years and look forward to assisting you.

background - estate 1.5mil and a house worth 180k
my husbands mom passed last year; his stepfather passed last month
when mom passed, stepfather changed WILL He changed his own will, I believe you are saying.

 

leaving a friend Executor, my husbands sister and niece to split 2ways (750k each) May I presume that the stepfather liked the step-daughter but not step son (your husband)? And had no kin of his own?

 

and quick deeded house to sister. OK, if he owned it, that is his prerogative.

 

Both sister and niece agreed to split 3-ways (500K) to include my husband becuz if mom had passed last, That was very nice of them, and yes, I believe that was the right thing to do, even if not legally obligated. Morally speaking.

 

she would have made son executor and split 2ways between siblings - sister and brother (my husband)

QUESTION/Dilema

1)executor/attorney told sister and niece they cannot split with brother becuz he is not in the will. is this true? No. However, they will likely have to inherit their FULL share, then gift him in some manner later, which will have nothing to do with the step-dad's estate at that time. That in itself will be an estate action of their own future, so they may want to consult with an estate lawyer to see how they can best protect all 3 of them from any tax implications. It is true that the sister/neice can not change the will - and if they disclaimed part of their inheritance, it will NOT go to your husband, but as per the will and if not so specified, under the law of intestacy, which will not include your husband.


2)if sister/niece each give 250k to brother (=500k) making each end with 500k, are there tax implications for brother since it is not technically inheritance written in the will? Likely, yes, that is what I was referring to above. They will want to meet up with a gift tax specialist to do it in the least damaging way - We can gift our property to a certain extent without pain, but once we exceed, effect our lifetime gifting total. Doesn't make this act no worth doing! But they will want it done in a way that minimizes any costs.

2)sister wants to quick deed house to brother, can they do this without tax issue for brother? Again, only if done in an exacting way. Income tax is technically applicable to ALL income (in kind, property or cash), so they will want to discuss it with the gift tax attorney, ensure it be a gift, or perhaps a creative work around that utilizes allowed exceptions or 'loopholes'.

it was just quick deeded to sister.... with no problem Well, not from a logistical point of view, quit deeding is legal, but the step father's lifetime gifting will have been reduced by X amount, which may or may not have implicated estate related taxes that will occur out of the probate of his estate and the particular tax laws that can be implicated.

 

so can they turn right around and quick deed to brother..Yes, but I urge them to consult with that tax attorney who handles, specifically, the tax details of gifting, inheriting, bequeathing, etc.

then brother assumes all ins, property tax, etc..Sure, like any other homeowner.

3) house 180k..1/3=60) if brother gets 500k, he wants to give each back 60k for their portion (1/3) of the house.. then what is left put in current Fidelity and Vanguard accounts...are there tax implications?Almost always :) Uncle Sam always has a hand out, it seems. But consider this AND of course, have them take ALL details to the tax specialist to ensure they do it in the best possible manner: As it is currently considered, he is to get a value = to $500k + $180k, because they want him to have the house, yet it seems that they aren't trying to give up their value share in the house, right? Thus, he is really only to get $500k+$60K=$560k in value, right? Consider then,since he wants the physical house, getting the house itself, giving him the house (there is $180k of $560k) leaving him "owed" only $380k in the remainder of that gift they want to give him. Rather than giving him $500k + house AND THEN him having to gift back $60k and $60k. Just a thought but nothing should be done without the detailed review and analysis of all of hte details by that tax attorney. Haste makes waste in cases like this, and if you are not on top of the many frequent tax law changes that are constantly happening, they can really lose out financially.

Optional Information:
Country relating to question: United States
State (if USA): Florida


As an aside, it is SO NICE to hear of family being ethical and generous to each other - it is usually not heard that way (by lawyers) when there is an estate involved and people stand to receive money that they didn't otherwise have a right to, until the loved one passed away. Truly, you make my evening.

I hope this helps! My goal is to provide you with excellent and accurate service – if you feel you have gotten anything less, please reply back, I am happy to address follow-up questions. Kindly rate me "excellent" when you are done. I look forward to assisting you in the future, should you have legal questions.

Sincerely,

Alexia Esq.

AlexiaEsq., Managing Attorney
Category: Estate Law
Satisfied Customers: 11845
Experience: 19+ Years of Legal Practice in Estate Law.
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