A revocable real estate trust should have no effect. The will is simply a
list of instructions.

Given the very little detail you've told so far, I would recommend an estate
planning attorney to review the details.

One big question for making this plan work, is does everybody effected by
this know, understand and agree?


"David Efflandt" <efflandt[at]xnet.com> wrote in message
news:slrnd8v2ei.8g9.efflandt[at]typhoon.xnet.com...
- quote -

On 20 May 2005 18:50:02 GMT, BMS <mcfarland[at]yahoo.com> wrote:
- quote -

I don't see how a will would affect over 65 property tax exemptions during
the life of current owners. But would they still get exemptions in a
trust? My sister has her home in a living trust, but I do not know the
details or what her state has for exemptions when she reaches 65.

For example my state can freeze the assessment at age 65, but I do not
know how a trust owning the property would affect that.

If you receive the house as a gift, you take on your grandparent's
basis in the house. As an inheritance, you get a step up to the fair
market value on date on death. There are no taxes to the inheritors.
There should also be not estate taxes for an estate that small. That's
if it's not considered a generation skipping transfer. If you're
parents are alive, the estate could be hit with that.

The easiest thing is to make you the administrator and have them leave
specific amouts to the other heirs with you getting the balance. The
exact wording of the will and the vehicles for transfer should be run
by a specialist lawyer.

You want to have the house in real estate trust, particularly if it is in a
state such Massachusetts with a lengthy probate process.

You are successor trustee and on the death get the step up value.

Go to the bank and get the mortgage or sell the house.

The following was cross-posted. Since it was on topic for this
newsgroup and we had the time, here is the post with corrected
headers.


Begin copy-------------------
From: "rip_saw777[at]yahoo.com" <rip_saw777[at]yahoo.comRe: Property Inheritance Strategy

I was wondering if someone can offer some legal and/or tax strategies
for the following scenario:

A relative (grandparent) wishes to bequeath me their residence. Their
primary source of money for their other bequeaths come from the value
of the house. They wish to leave me house for a percentage of its
current value (i.e. if the value of the house is 400k and they total
bequeaths are 200k, then I would need to take a 200k mortgage on the
house). I have read that leaving it in a will vs. giving it as a gift
has a significant impact on how the IRS interprets the base value of
the house (the house was purchased over 60 years ago). It would not
make sense to put me on the will now, since the current title holder
would lose their special property tax exemption for being over 65.

What I want to do
* Avoid heavy taxes for myself after death
* Easy transition
* Clause for how the house will be taken care of while I take out a
mortgage

What I don't want to do/have
* Problems with challenges from relatives
* Complications with the city or IRS.

If anyone can suggest any suggestions or personal experiences it would
be much helpful. BTW just incase, the property is located in the state
of NY.

Regards
John


End copy---------------------




-HW "Skip" Weldon
Columbia, SC