Finance

Have finance questions? Ask a financial expert online.

Ask an Expert,
Get an Answer ASAP!

It's not a tax question. I recently received an early

Customer Question
It's not a tax...

It's not a tax question

Accountant's Assistant: The Accountant will know how to help. Please tell me more, so we can help you best.

I recently received an early inheritance from my parents in order to buy a house. They gave me $200k. This was put towards a house worth $750k. So, the $200k is about 26.6% of the total price. My parents intention was always that their assets would be divided equally between my brother and me. My brother has insisted though, that when my parents will is finally executed, he should receive not only $200k more than me, but also the appreciation on my $200k that is achieved through the value of my property rising. Basically he wants 26.6% of the value of my property, at the time the will is executed, to be taken out of the assets of the will. So if my property were to double in value, 26.6% would have doubled to $400k. If my parents leave behind $800k, then he takes $400k from that straight away, leaving $400k to be divided equally between us. Is this fair? i can see that the value of the initial $200k will have grown with the value of the house. But in order for me to access that I have to sell the house and buy a cheaper (smaller) one. Whereas he gets the cash to do with as he pleases. Like I said, is this fair, considering my parents wishes that everything is divided equally?

Accountant's Assistant: Is there anything else the Accountant should be aware of?

Not that I can think of right now

Submitted: 7 months ago.Category: Finance
Show More
Show Less
Ask Your Own Finance Question
Answered in 12 minutes by:
12/22/2017
Financial Professional: Chad EA, CDFA®, CFP®, CERTIFIED FINANCIAL PLANNER ®, Professional replied 7 months ago
Chad EA, CDFA®, CFP®
Chad EA, CDFA®, CFP®, CERTIFIED FINANCIAL PLANNER ®, Professional
Category: Finance
Satisfied Customers: 2,643
Experience: IRS Licensed Enrolled Agent, CDFA ® CFP ®, MBA
Verified

Welcome to JustAnswer!

My name is***** will be able to assist you today.

If your parents already gave you $200K and you purchased a home in your name only, then the question of "fair," would be your question alone to answer.

___

When a life time gift is completed, such as the one your parents made to you for the home, the $200K becomes your sole property. You have no obligation to give your brother any amount, if you so choose.

___

If your parents, for example leave $800K behind then they should first, write clear written instructions on how they wish to have the $800k dispersed.

Any will may be contested. Therefore, I recommend your parents name beneficiaries to specific accounts and assets.

However, the $200K that your parents gave you during their lifetime will not be included in their final estate. The $200K is a completed gift to you and therefore you would be solely responsible to determine what is fair, if any amount is fair. Any amount you give your brother would be a gift from you to him and need to be reported to the IRS.

The increase or decreased value of the home would not be taken into consideration in settling the estate.

I am happy to expand on my answer or answer any follow up questions you may have.

Thank you!

Ask Your Own Finance Question
Customer reply replied 7 months ago
I think "fair" was the wrong word to use. I think "equal" would have been better. My parents will write into their will the formula my brother wants to use - that he gets 26.6% of the value of my property taken out of the will first, and the rest is divided equally. So I won't be giving him anything. What is concerning me is that he will get a large amount of cash to do with as he pleases, whereas I will have to sell my house in order to access that same amount. Meaning I would have to buy a cheaper house (assuming property value rises). From a financial point of view, is there a difference between cash and value tied into property?
Financial Professional: Chad EA, CDFA®, CFP®, CERTIFIED FINANCIAL PLANNER ®, Professional replied 7 months ago

I understand fair and equal.

Once the property is yours, via a life time gift, the $200K or 26.6% of the home value really isn't your parents property to give away.

How they word the will under these circumstances will be subject to scrutiny and like any other will contestable.

continued....

Ask Your Own Finance Question
Financial Professional: Chad EA, CDFA®, CFP®, CERTIFIED FINANCIAL PLANNER ®, Professional replied 7 months ago

There is a lot of other information to take into consideration. For example, if you did have to sell your home to pay your brother how would the transaction cost be handled?

Ask Your Own Finance Question
Financial Professional: Chad EA, CDFA®, CFP®, CERTIFIED FINANCIAL PLANNER ®, Professional replied 7 months ago

From what you shared, you, your brother and parents should really sit down and confront this situation while your parents are still alive and able to address this is.

The very last thing you want to do is be in a court battle over your parents estate with your brother. At the end of the day a large chunk of your parents estate will go towards attorney fees.

Ask Your Own Finance Question
Financial Professional: Chad EA, CDFA®, CFP®, CERTIFIED FINANCIAL PLANNER ®, Professional replied 7 months ago

The court will first look towards the will to determine what the intentions of your parents were and then apply state law, if the court can't decipher your parents true intentions.

Ask Your Own Finance Question
Financial Professional: Chad EA, CDFA®, CFP®, CERTIFIED FINANCIAL PLANNER ®, Professional replied 7 months ago

In my experience, this situation is best handled with a frank conversation while taking into consideration all the cost.

It would be my opinion that a home also has cost associated with the up keep. Would cost such as this be factored into the 26.6%?

Ask Your Own Finance Question
Financial Professional: Chad EA, CDFA®, CFP®, CERTIFIED FINANCIAL PLANNER ®, Professional replied 7 months ago

If you have no further questions please take a moment to rate and accept my answer by clicking on three stars or more.

A positive rating of 5 stars or more is always appreciated.

Thank you!

Ask Your Own Finance Question
Was this answer helpful?

How JustAnswer works

step-image
Describe your issueThe assistant will guide you
step-image
Chat 1:1 with a financial professionalLicensed Experts are available 24/7
step-image
100% satisfaction guaranteeGet all the answers you need
Ask Chad EA, CDFA®, CFP® Your Own Question
Chad EA, CDFA®, CFP®
Chad EA, CDFA®, CFP®
Chad EA, CDFA®, CFP®, CERTIFIED FINANCIAL PLANNER ®, Professional
Category: Finance
Satisfied Customers: 2,643
2,643 Satisfied Customers
Experience: IRS Licensed Enrolled Agent, CDFA ® CFP ®, MBA

Chad EA, CDFA®, CFP® is online now

A new question is answered every 9 seconds

How JustAnswer works:

  • Ask an ExpertExperts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional AnswerVia email, text message, or notification as you wait on our site. Ask follow up questions if you need to.
  • 100% Satisfaction GuaranteeRate the answer you receive.

JustAnswer in the News:

Ask-a-doc Web sites: If you've got a quick question, you can try to get an answer from sites that say they have various specialists on hand to give quick answers... Justanswer.com.
JustAnswer.com...has seen a spike since October in legal questions from readers about layoffs, unemployment and severance.
Web sites like justanswer.com/legal
...leave nothing to chance.
Traffic on JustAnswer rose 14 percent...and had nearly 400,000 page views in 30 days...inquiries related to stress, high blood pressure, drinking and heart pain jumped 33 percent.
Tory Johnson, GMA Workplace Contributor, discusses work-from-home jobs, such as JustAnswer in which verified Experts answer people’s questions.
I will tell you that...the things you have to go through to be an Expert are quite rigorous.

What Customers are Saying:

I really was impressed with the prompt response. Your expert was not only a tax expert, but a people expert!!! Her genuine and caring attitude came across in her response...

T.G.WMatteson, IL

I WON!!! I just wanted you to know that your original answer gave me the courage and confidence to go into yesterday's audit ready to fight.

BonnieChesnee, SC

Great service. Answered my complex tax question in detail and provided a lot of additional useful information for my specific situation.

JohnMinneapolis, MN

Excellent information, very quick reply. The experts really take the time to address your questions, it is well worth the fee, for the peace of mind they can provide you with.

OrvilleHesperia, California

Wonderful service, prompt, efficient, and accurate. Couldn't have asked for more. I cannot thank you enough for your help.

Mary C.Freshfield, Liverpool, UK

This expert is wonderful. They truly know what they are talking about, and they actually care about you. They really helped put my nerves at ease. Thank you so much!!!!

AlexLos Angeles, CA

Thank you for all your help. It is nice to know that this service is here for people like myself, who need answers fast and are not sure who to consult.

GPHesperia, CA

< Previous | Next >

Meet the Experts:

Rakhi Vasavada

Rakhi Vasavada

Financial and Legal Consultant

2,609 satisfied customers

Graduated in law with Emphasis on Finance and have have been working in financial sector for over 12 Years

Megan C

Megan C

Certified Public Accountant (CPA)

2,222 satisfied customers

Licensed CPA, CFE, CMA, CGMA who teaches accounting courses at Master's Level

Manal Elkhoshkhany

Manal Elkhoshkhany

Tutor

1,933 satisfied customers

More than 5000 online tutoring sessions.

JKCPA

JKCPA

CPA

844 satisfied customers

Bachelors degree and CPA with Accounting experience.

Eric

Eric

Financial Manager

559 satisfied customers

Loan servicing, counseling and real estate expert. Foreclosure Expert and Financial Planner.

R. Klein, EA

R. Klein, EA

Accountant

480 satisfied customers

TurboTax Expert. QuickBooks Certified Pro Advisor

Dimitry K., Esq.

Dimitry K., Esq.

Attorney

332 satisfied customers

NASD Licensed Rep, 1997-2001, Business Attorney

< Previous | Next >

Related Finance Questions
Selling our home: 1412 Highland – $500,000 valuation July 2,
Selling our home: 1412 Highland – $500,000 valuation July 2, 2018Idea is to make Highland a meaningful tranfer to 3 sons with no money down. Brandon. Ryan. Travis. Travis, however, wants to own the pr… read more
Dr. Fiona Chen
Dr. Fiona Chen
President
Ph.D.
1,172 satisfied customers
My brother and I inherited my mom's house. This is in the
My brother and I inherited my mom's house. This is in the state of South Carolina. I want to buy his half of the house. He will receive roughly 75000. What is he looking at tax wise on this income. … read more
Barbara
Barbara
Enrolled Agent, Paralegal
5,465 satisfied customers
I inherited agricultural land and sold to my brother in
I inherited agricultural land and sold to my brother in 2016. Our attorney said we would not have to pay taxes. My brother gave us a S-Corporation non-taxable last year. This year he gave us a 1099- m… read more
Chad EA, CDFA®, CFP®
Chad EA, CDFA®, CFP®
CERTIFIED FINANCIAL PLANNER ®, Professional
Master's Degree
2,643 satisfied customers
My wife and I want to pay off 100k in debt and so we can buy
My wife and I want to pay off 100k in debt and so we can buy a home within the next 2 years. We currently live in California and think that maybe moving to a state with no income tax will help more. W… read more
Chad EA, CDFA®, CFP®
Chad EA, CDFA®, CFP®
CERTIFIED FINANCIAL PLANNER ®, Professional
Master's Degree
2,643 satisfied customers
My mother is currently in a rehab facility and faces the
My mother is currently in a rehab facility and faces the prospect of continued nursing home care. She currently has $17,000 in savings and lived at home which is titled to my sister and I. This quitcl… read more
Lev
Lev
Retired
Bachelor\u0027s Degree Equivalent
27,134 satisfied customers
My husband's family sold his deceased parents' home. The
My husband's family sold his deceased parents' home. The funds were distributed to all children and spouses of deceased children and grandchildren in line with California law. The funds were distribut… read more
keeperumiami
keeperumiami
Sr Financial & Tax Consultant
Bachelor\u0027s Degree
1 satisfied customers
I am buying a home with the help my Father and he will be
I am buying a home with the help my Father and he will be living with us. My wife and I will net $200k out of our current home when sold. My Father will provide another $600k for the $800k purchase pr… read more
Lev
Lev
Retired
Bachelor\u0027s Degree Equivalent
27,134 satisfied customers
I am in the middle of a divorce. I have a 401K through my
I am in the middle of a divorce. I have a 401K through my employer.. it had 150K in 2000 which is 2 years before I go married in 2002. Now the account has 115K in it. I have been putting money into at… read more
Lane
Lane
JD, MBA, CFP, CRPS
Doctoral Degree
47 satisfied customers
I am in the process of setteling a $500K account receivable.
I am in the process of setteling a $500K account receivable. One of my options is to take $400K in free and clear land presently zoned agriculture. How can I structure this to avoid taxes? Is taking a… read more
PDtax
PDtax
Owner
Master\u0027s Degree
1 satisfied customers
Hi,I have a plot available to me which has an existing
Hi, I have a plot available to me which has an existing bungalow on it. I have two options which are: 1) purchase the property with a regular mortgage, gain planning permission for two 4 bedroom house… read more
rachel webb
rachel webb
paralegal studies
Not sure which expert to ask but I believe this is a financial
Not sure which expert to ask but I believe this is a financial issue that has different aspects and involves my my parents, myself and my brother. The issue is that I think the time is coming soon whe… read more
FloridaCPA1
FloridaCPA1
Master\u0027s Degree
42 satisfied customers
In transferring a real estate property from mother to son and
In transferring a real estate property from mother to son and how that would affect son with capital gains and/or gift tax and can that be eliminated?… read more
winktax
winktax
Enrolled Agent
Master's Degree
349 satisfied customers
O.A. to my brother, who at the moment is in a nursing home
I am P.O.A. to my brother, who at the moment is in a nursing home due to the fact that he is incompetent to do normal functions and has dementia and needs 24/7 care. We are about to turn the deed to h… read more
Rakhi Vasavada
Rakhi Vasavada
Financial and Legal Consultant
Bachelor's Degree
2,609 satisfied customers
Form 982-Qualified Primary Res v. Insolvency Hello, I have
Form 982-Qualified Primary Res v. Insolvency Hello, I have a 1st and 2nd with the same bank. My mortgage bank contacted me and offered to modify my ARM 1st Mtg to a fixed rate and forgive $200k. We di… read more
TaxTom
TaxTom
Accountant
Bachelor\u0027s Degree
14 satisfied customers
If a quit claim deed was executed in 2007 and the sale of a
If a quit claim deed was executed in 2007 and the sale of a house is set for June 2009, what is the best way to divide the proceeds so the proceeds can be used for a aging parent (81) that may need nu… read more
Lev
Lev
Retired
Bachelor\u0027s Degree Equivalent
27,134 satisfied customers
My wifes parents quick claimed their home and property located
My wife's parents quick claimed their home and property located in Helena MT as a gift to their 3 children in 1996. My wife quicked claimed her interest in the property to her 2 siblings in 2008 for a… read more
James Heal
James Heal
Bachelor\u0027s Degree
495 satisfied customers
My husband owns a roofing/contracting business, ...
My husband owns a roofing/contracting business, started before our marriage, that is a sole proprietorship. I worked outside the home and we filed a joint tax return because of the tax savings. I''ve … read more
Lev
Lev
Retired
Bachelor\u0027s Degree Equivalent
27,134 satisfied customers
My fater worked at General Motors. After my mother died he ...
My fater worked at General Motors. After my mother died he apparently never made anybodyelse his bebeficary. He also never remarried. Who will get the money. There were 3 children born to this marriag… read more
Ed Johnson
Ed Johnson
Senior HR Consultant and Business Devlpm
Bachelor's Degree
6,994 satisfied customers
Disclaimer: Information in questions, answers, and other posts on this site ("Posts") comes from individual users, not JustAnswer; JustAnswer is not responsible for Posts. Posts are for general information, are not intended to substitute for informed professional advice (medical, legal, veterinary, financial, etc.), or to establish a professional-client relationship. The site and services are provided "as is" with no warranty or representations by JustAnswer regarding the qualifications of Experts. To see what credentials have been verified by a third-party service, please click on the "Verified" symbol in some Experts' profiles. JustAnswer is not intended or designed for EMERGENCY questions which should be directed immediately by telephone or in-person to qualified professionals.

Disclaimer: Information in questions, answers, and other posts on this site ("Posts") comes from individual users, not JustAnswer; JustAnswer is not responsible for Posts. Posts are for general information, are not intended to substitute for informed professional advice (medical, legal, veterinary, financial, etc.), or to establish a professional-client relationship. The site and services are provided "as is" with no warranty or representations by JustAnswer regarding the qualifications of Experts. To see what credentials have been verified by a third-party service, please click on the "Verified" symbol in some Experts' profiles. JustAnswer is not intended or designed for EMERGENCY questions which should be directed immediately by telephone or in-person to qualified professionals.

Show MoreShow Less

Ask Your Question

x