Good Evening! Wondering if you can help me!
My grandparents passed away fairly recently...we lost my grandfather two years ago and my grandmother a few months ago. Many years ago, there was a will prepared but since that time (and about eight years ago) the home that my grandparents owned and my parents lived in as well was transferred into my mother's name (along with my grandparents names) as it was their intent to give the home to the child
who lived with them and cared for them and the home through the years. This was the largest asset
in my grandparents' estate. The rest of the assets were liquid bank accounts which listed my mother as either a joint signer or POD accounts listing my mother as the beneficiary
. We have retained an attorney to aid my Mom in distributing the liquid assets (approx 350K) to her three siblings. My questions involve taxes
As the assets do not require probate court and have transferred to my mother by virtue of the account titles, is this still considered an "estate"? The attorney will be helping her distribute the funds in the bank as my grandparents had detailed in their will. We simply will not need to enter the probate process.
As the assets are much less than 5.25 million (federal estate tax
exemption) and less than 1 million (Massachusetts State
exemption), am I correct in assuming that my mother will not need to file an estate tax on behalf of the estate?
As Massachusetts does not have an Inheritance
tax for the beneficiaries, am I also correct in assuming that my mother's siblings will not have to file an income
for the inheritance they will be receiving?
The biggest question I have is this....if we do not need to enter the probate process to distribute my grandparents "estate", does the IRS
look at this as an estate situation with regard to taxes? Or because the money has passed into my mother's name without probate does it become a "gift" situation with my mother gifting the money to her siblings?
If that is the case, how do the taxes work? Each sibling will receive approximately 80K...well beyond the 14K allowed as a gift per year.
Thank You so much for your help! I am trying to help my parents through this process....