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There are other assets in addition to the cash that could fall under the $338,333. Because my sister is now the sole owner of the cash, isn't it correct that those funds are not part of my mother's estate, so there would be no estate tax to begin with on the cash? My sister is not the executor of the estate. She is just holding the cash because she was the joint owner on the accounts. In order to distribute the cash to the siblings, she has been told she can gift each of her siblings up to $12,000 per year without her being taxed. Is that correct? I researched a little and read that since she is married she can gift up to $24,000 to an individual in one year. Is that also correct? I also read that she can gift up to $12,000 (or $24,000) per year to as many individuals as she chooses. Is that correct? If each of the siblings share was more than that $24,000, could my sister possibly gift the remaining money to her siblings' children so that then all of the cash could be distributed more quickly than $12,000 per year per sibling? I'm not sure why my mother was advised to do this, but it is the situation we are faced with resolving. In a nutshell, we just need to get the cash to everyone as quickly as possible without paying any more taxes than necessary. Thank you.
This is very helpful, but I still feel I need to better understand exactly how the cash fits into the overall estate picture, if it does at all. I think someone advised my mother to have my sister as joint owner of the cash accounts. By doing so, upon my mother's death, the cash stays out of her estate. I think then, it is not technically inherited by my sister, but she just becomes the sole owner of it, so it is not part of my mother's estate for purposes of estate taxes. The intent is to equally divide it among the siblings, but the question becomes -- how does my sister do that without her having to pay any taxes?
Secondly, If I understand correctly, as long as my sister's final gift/estate distributions are below $1 million dollars, then she will not pay any taxes, even though they would have been calculated on tax returns in the years she made them. Is that also a correct understanding?