My in-laws are lifelong SC residents -- husband and wife, both in mid-70's, with three adult children, and are updating their wills. The wife owns several large parcels of land that are titled jointly with her brother (also 70-ish). The properties have been in the family for a long time, and were transferred to them years ago from their father (but not inherited, so no update of the cost basis occurred). What is the best path for the wife and her brother to plan for the disposition of these properties in their wills/estates ?
I agree with both attorneys below. Your in-laws should consult with an attorney on how to best structure this to accomplish their goals. There are a number of mechanisms which can work, including deeding the property outright, but reserving a life estate, putting the property into a company, and then gifting shares in the company in an amount that is under the annual gift tax, disposing of the property with a Will, or putting it into a trust. There are medicaid look back issues and gift tax issues to think about in addition to the basis in the property if and when it is sold.
This answer is for general advice and does not create an attorney client relationship with James Mosteller.
A lot depends on the type of joint tenancy involved. If it is joint tenancy with rights of survivorship, the survivor takes it all. If it is tenants in common heirs get their shares. This matter needs to be addressed directly with an estates attorny. There are many issues here that need to be explored in a face to face meeting.
For more on these and other issues, see Estate Planning Mistakes: 5 Not So Easy Pieces at http://www.sjfpc.com/estate_planning_drafting_wills_trusts.html
Hope this helps.
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Mr. Fromm is licensed to practice law throughout the state of PA with offices in Philadelphia and Montgomery Counties. He is authorized to handle IRS matters throughout the United States. His phone number is 215-735-2336 or his email address is [email protected] , his website for more tax, estate and business articles is www.sjfpc.com. and his blog is
LEGAL DISCLAIMER Mr. Fromm is licensed to practice law throughout the state of PA with offices in Philadelphia and Montgomery Counties. He is authorized to handle IRS matters throughout the United States. His phone number is 215-735-2336 or his email address is [email protected] , his website is www.sjfpc.com. and his blog is <http://frommtaxes.wordpress.com/> Mr. Fromm is ethically required to state that the response herein is not legal advice and does not create an attorney/ client relationship. Also, there are no recognized legal specialties under Pennsylvania law. Any references to a trust, estate or tax lawyer refer only to the fact that Mr. Fromm limits his practice to these areas of the law. These responses are only in the form of legal education and are intended to only provide general information about the matter within the question. Oftentimes the question does not include significant and important facts and timelines that if known could significantly change the reply or make such reply unsuitable. Mr. Fromm strongly advises the questioner to confer with an attorney in their state in order to ensure proper advice is received. By using this site you understand and agree that there is no attorney client relationship or confidentiality between you and the attorney responding. This site should not be used as a substitute for competent legal advice from a licensed attorney that practices in the subject area in your jurisdiction, who is familiar with your specific facts and all of the circumstances and with whom you have an attorney client relationship. The law changes frequently and varies from jurisdiction to jurisdiction. The information and materials provided are general in nature, and may not apply to a specific factual or legal circumstance described in the question or omitted from the question. Circular 230 Disclaimer - Any information in this comment may not be used to eliminate or reduce penalties by the IRS or any other governmental agency.
I agree with Attorney Fromm's answer. Without knowing how things are currently held, along with a number of other factors, it is hard to give you any kind of confident answer. There are a number of options available to you, depending on your objectives, and seeing an estate planning attorney is the best way to make sure that this is set up properly.
I will add two small points. If your estate plan is set up through your Will, probate will be necessary to pass your interest on, to your beneficiaries. Many people prefer to avoid probate. This is generally not possible through a Will.
Second, and more importantly, regardless of what you do with the title of these properties, you should have durable power of attorney forms established for health care and financial matters. That way, you can name the person(s) who will act for you, if you ever become incapacitated. This avoids the need to go to the probate court for appointment of a guardian and/or conservator. This type of form is arguably more important than a Will or Trust because it arranges for someone to take care of YOU, while you are still alive.
*** LEGAL DISCLAIMER I am licensed to practice law in the State of Michigan and have offices in Wayne and Ingham Counties. My practice is focused in the areas of estate planning and probate administration. I am ethically required to state that the above answer does not create an attorney/client relationship. These responses should be considered general legal education and are intended to provide general information about the question asked. Frequently, the question does not include important facts that, if known, could significantly change the answer. Information provided on this site should not be used as a substitute for competent legal advice from a licensed attorney that practices in your state. The law changes frequently and varies from state to state. If I refer to your state's laws, you should not rely on what I say; I just did a quick Internet search and found something that looked relevant that I hoped you would find helpful. You should verify and confirm any information provided with an attorney licensed in your state.
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