1. Home
  2. Taxes General Forum
  3. Transfering Assets

Transfering Assets

My mother-in-law recently passed away leaving an estate worth about $400K in securities. According to the will (which has been probated) the assets are to be split equally between between my wife and her brother. My wife is sole executor. My brother-in-law (the co-heir) has stated he does not want any of the financial assets (he is independently wealthy), only some of the personal assets (mementos) which my wife, as executor has no problems. How do we transfer the financial assets (stocks, bonds, etc) to my wife's name so that she get the full basis value as opposed to 1/2 with the other half as a gift from her brother (which would potentially cause him a future gift tax problem).

In addition, both my wife and her brother now jointly own a condominium apartment valued at about $350K titled with them as owners and my now deceased mother-in-law as life tenant (on the title). Again, how do we transfer the property to my wife at full basis.

Let me clearly state that the are no family disputes here, but we do want to avoid any in the future.

Reply to
KSB
Loading thread data ...

"KSB" wrote

Well, the full step up in basis happens upon the death of the owner. So that's a non-issue as far as I know.

The issue is a legal one, in that if he were to just disclaim the inheritnace, what laws prevail (the will or state laws) as to who gets the amount he would have inherited. It's probably worth talking to a lawyer (you probably should have done this earlier) about this matter.

Same process as above. Talk to a lawyer in that state - one familiar with estates.

If he can disclaim the inheritnace and it would go to her by will (as if he predeceased her), then that's the easiest way to go. If his disclaiming the inheritnace would send those assets to his wife or children, then you probably don't want to go that method. Again, the will or state law will guide you through the what-iffs here.

Otherwise, he inherits it and gifts it to her (he'd have to file a gift tax return though).

Reply to
Paul Thomas, CPA

The brother-in-law needs to disclaim his inheritance. He does this by notifying the executor in writing (best to have his signature notarized) that he is disclaiming any inheritance from his mother's estate. Under federal law, this must be done within

9 months from date of death. States that still tax estates or inheritances may have an earlier deadline. All of the above assumes that your wife would remain as the sole heir. I.e., there are no other contingent beneficiaries.
Reply to
Alan

Excellent advice. If state law tracks federal law, the heir will have nine months from the date of death to exercise a qualified disclaimer. When that is done, the disclaimed property passes as if the named beneficiary died before the decedent.

Depending on the exact wording of the deed, it might be as simple as recording a certified copy of the death certificate. But you really should have a lawyer go over the deed to be sure.

Excellent analysis.

I suppose he could sell it to her for market value, and take back a note for which the payments would be $12,000 per year or less. The problem with this is that someone will be responsible for paying tax on interest payments that are never actually made.

Stu

Reply to
Stuart Bronstein

$24,000 or $48,000, depending on whether or not the brother is married.

Seth

Reply to
Seth

BeanSmart website is not affiliated with any of the manufacturers or service providers discussed here. All logos and trade names are the property of their respective owners.