Moderator:
This may be either a duplicate post or an omitted post.
I do not recall reading them and found them as I was
cleaning up some disk space
================================================== ==========

- quote -

QCD's cause problems. What if you are involved in an
accident and creditors go after your assetts? Your Mom
could loose her home.

CPAs check me on this, if the Mother clears the husband off
the title and claims half the stepped up value should Dupree
inherit the house there will be a lower basis available for
IRA to think about????

In addition, Dupree will not need to revisit the father's
will, or lack thereof.

What my parents did was to put the home in a revocable
living trust. They didn't loose control of the home (when
sold it got the $ exemption), and if the house was still in
the trust it would have passed under the provisions of the
trust at the stepped up value and you would not need to
probate the title. Hire an elder law attorney to do that
(that person should also help her prepare a health care
directive and POA for health care) but it will be money well
spent. Make it your birthday/Christmas.. gift to her.

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AJDupree at anjadupree[at]hotmail.com wrote on 8/5/05 8:38 AM:

- quote -

I doubt that you can get an appraiser to do that but they
can give you some idea of how accurate the appraisal was 6
months ago. It is up to you to reduce the amount
accordingly as an estimate.

- quote -


- quote -

Yes. Property should always be appraised at the time one of
the owners dies. Assuming that property usually
appreciates, it is the heir's best interests to try to prove
the step up value on the date of death. With no proof, the
IRS could choose a lower number that you may not like very
much. How would you rebut their figure?

- quote -

See previous paragraph.

- quote -

Trusts have two major purposes, protection from estate tax
and avoidance of probate. Assuming your mom has assets less
than $1.5 million, she does not have to worry about #1. If
probate will be simple and quick, perhaps she does not have
to worry about #2. If the cost of probate with the house
will be more than the cost of the trust, the trust may be a
winner.

- quote -

Most attorney's discourage specific bequests in wills. That
is better done with a letter of instructions.

All freely provided advice guarantee correct or double your
money back

Frank S. Duke, Jr. CPA
Cincinnati, OH USA

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"AJDupree" <anjadupree[at]hotmail.com> wrote:

- quote -

Yes. Qualified appraisers do that kind of thing all the
time.

- quote -

Many attorneys would say that - you can pay them $1000 now
or your kids can pay them $5,000 later. You can guess which
one they'd prefer.

Stu

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ayle[at]ashtonnw.com wrote:

- quote -

Probate costs vary by State. In mine (SC) probate courts
are borne (largely) by general tax revenues, not the
estates. Thus probate costs are not as significant as they
are in other States.

RLTs, by their nature, may be distributed more quickly.
However, I've seen instances where the Trustee dragged
his/her feet. Seems some Trustees enjoy receiving those
management fees. <grin
-HW "Skip" Weldon
Columbia, SC

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Sorry - I forgot to say my location. My mom and I both live
in MICHIGAN.

So even tho my dad died 6 months ago, she can get the house
appraised now, for what it was worth THEN? You can do a
post-date appraisal? Would that appraisal then be filed away
with the Will or something to prove what the value of it was
in Feb. '05? And then when my mom does die, should it be
appraised again at that time? Or only if and when I would
decide to sell the property? Which could be a year later, 5
years later, or 25 years later, or never.

I don't think she'd want to do a trust as I know those are
upwards of $1000 to set up. When I spoke with an estate
attorney shortly after my dad's death he said she could do a
trust, but probably does not need one as her estate is
pretty straight-forward and simple, and I'm an only child,
and most trusts are set up when people's estates are large
and/or they are wealthy/have a lot of assets. Which she
doesn't.

So basically, she could get by without a Will at all, but
she could just spend the $75 to get a Will made up which
might speed up and simplify things, both logistically and
monetarily, when the day comes... And if there's any other
mementos, etc. that she wants to leave to friends, etc. that
would be spelled out there also.

She has an appointment with a lawyer on the 24th and she
asked them if they'd be willing to call me at work (I live 2
hours away) so we both understand what is being done and
why, and any questions I might have (i.e. trust, joint
tenancy, etc.) could be addressed as I don't think my mom
would be able to re-explain to me what the lawyer would tell
her. They said they'd be fine with calling me and
conferencing me in.

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<The problem is that it's a bit more expensive than a simple
will or a deed.
But probably less than probate.

An attorney would also discuss a health care directive and a
POA for health care, which can be very valuable.

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AJDupree at anjadupree[at]hotmail.com wrote:

- quote -

In most places, you are her direct heir by default. A will
could help control who gets the property if you predecease
her or if you subsequently died and she did not want your
heirs to have it.

- quote -

For what purpose? This is a lot like saying you need a
wrench without any idea what you are going to fix.

- quote -

Yes. It also might be a taxable gift if it is worth more
than $11,000, requiring a gift tax return.

- quote -

That will eliminate any capital gains that that might have
been due on sale. She should get it appraised. If she does
not live in a community property state, half of it stepped
up in basis to fair market value when you dad died, assuming
it was jointly held. If she lives in a community property
state like CA, the basis is now fair market value on the
date of your dad's death.

- quote -

So most likely, the basis was close to ZERO before your dad
acquired it.

- quote -

That would be the cost basis before your dad's death, plus
the cost of any capital improvements. After his death, some
or all of it stepped up in basis to FMV on the date of his
death.

- quote -

Yes, plus the value of any capital improvements.

- quote -

No.

- quote -

Yes.

- quote -

That is correct. If you inherit it, you will inherit at FMV
on the date of your mom's death and that will be your new
basis for any future sale.

- quote -

$1.5M going up to $2M in 2006.

CPAs don't provide legal advice but I don't see any obvious
difference in your inheritance position, whether you mom has
a will or not. There may be other sound reasons for a will
but it sounds like you are her only heir.

I would tell her to leave the house just as it is, get it
appraised as of the date of your dad's death and leave it to
you. You will get the step up of basis when she dies and
all accumulated capital gains will be erased.

All freely provided advice guarantee correct or double your
money back

Frank S. Duke, Jr. CPA
Cincinnati, OH USA

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"AJDupree" <anjadupree[at]hotmail.com> wrote:

- quote -

[Issue - should mom have a will or a quitclaim deed?]

You haven't said which state you are in, so state laws may
be different from the general rule, upon which I base my
comments.

Technically, since you are an only child a will is not
absolutely necessary, since when someone who is unmarried
dies without a will her property goes to her children.

With a will or without, the property will go through probate
and will eventually go to you. The major difference is that
with a will your mother can name an executor and waive any
bond requirement. Without a will the judge will determine
who will be the personal representative of the estate, and a
bond will probably be required, adding expense to the
estate.

A quiteclaim deed would transfer the property to you now.
That is not what is intended, and it's not what I would
advise. A joint tenancy deed might be better. It transfers
a partial interest in property now, but the balance will
transfer without probate when your mother dies. There are
potential problems with joint tenancies as well, so don't do
one unless you talk to a lawyer and answer all his
questions.

The best solution would be a living trust. It would not
change ownership of the property now, it would avoid probate
and it would assure that you will become the owner when your
mother dies. The problem is that it's a bit more expensive
than a simple will or a deed.

Stu

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Under current law, assuming your mother does not succumb to illness
which might eat up her entire estate, you would receive a stepped up
basis in the property at the time of your mom's passing. In other
words, "you would have basis in the property at it's fair market value
on that day". The likelihood is that if you were to sell the home,
shortly after that date (maybe later) you will have no gain and
possibly a loss on the sale.

Under proposed new law, with the elimination of the "death tax", you
could be stuck with your mother's basis. That would be your mom's
basis in the home + the step up in your father's share on the date of
his passing. Included in basis would be improvements made after they
took possession of it. There may be certain exclusions but nothing is
in stone at the moment.

Depending on the size of your mom's estate, the value of the home, your
intent, etc., it's likely your mom should consult an attorney.
Chances are that you could pass on before your mom. Then, what would
she want??? In that event, there could be another set of
circumstances!!=

If you were to live in the home as your primary residence (once you
take ownership), for two years out of the 5 years prior to your selling
it, you would be able to exclude up to $250,000 in gains on the sale
($500,000 if married filing jointly).

"Jack"-

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Not sure if this should go to this forum or the misc.legal one...

I want to see if the conclusion I've come to is correct. My
dad died in February, and he did not have a will. Luckily he
didn't have complicated investments or anything, and
everything just passed on to my mom automatically - the
house, car, etc. I had asked my mom a bit later if she had a
will, since my dad didn't I assumed she didn't either. She
does not.

Last weekend my mom said that she was thinking she should
get a will or something so that she could make sure I
inherit the house, and I agreed. I am an only child, so
there are no other children to "fight" with over the house
or anything. Anyway, she told me that she was talking to a
friend of hers and she told her that my mom should get a
Quit Claim Deed. I told my mom that I thought she should
just go to a lawyer and get a Will made up for $75-100
(after my dad died I called some attorneys up there and
that's about what they charge for a simple will). She kept
saying something about a Quit Claim Deed, and I told her
that I didn't know WHAT exactly a QCD was, but I knew from
reading about this issue that the best bet for me tax-wise,
after her death, would be if she Willed me the property, and
that she should NOT add my name to the title.

So anyway, today I was researching QCD's online and the
understanding I have of them is that she would basically be
doing what I told her she shouldn't - adding my name to the
title or traferring the property to me completely. Is that
correct? And if the property was transferred completely to
me via QCD, I would now be responsible for any maintenance
and property taxes, etc. even tho she still lives there,
etc. (BTW the house is all paid off.)

The way I understand it, she should keep the house 100% in
her name (actually my dad's name is still on it right now),
and Will the house to me after her death. See, this is the
house that my grandfather built and my dad was born in and
has lived in his entire life. Probably 20+ years ago my
parents bought the house from my grandma (which is the Deed
or Title that my mom has to find in the house somewhere). So
if it was Quit Claimed to me now, IF I decided to sell it
after my mom's death, any capital gains would be figured
from whatever amount the house was worth back 20+ years ago
versus what it sold for, right? Or maybe even the value of
it from before that time, when my grandpa bought the land?
I'm not sure about this part. But anyway, this might be
quite substantial, especially taking into account where the
house is located. Whereas if I inherited the house via a
Will, a new "value" would be given the property as of the
date of my mom's death, and IF I decided to sell the house,
any gains would be figured from that higher current-day
amount , correct?

However - what if I decided to keep the house and not sell
it at all? Which is what I would prefer to do. I'd like to
be able to keep the house and use it as a vacation home or
retirement home over the years. Then I wouldn't actually
have to pay any taxes on it at all, as long as I don't sell
it, right? I doubt it would hit the Estate Tax amount of $1
Million or whatever it is. I'd just have to pay annual
property taxes on it, which I'm not sure what they would be
since I wouldn't get the homestead exemption thing as it
would be a second home.

I just want to make sure I understand everything correctly
so I can try to explain to her why it's better if she has a
Will drawn up, rather than a QCD that her friend is telling
her to do.

<< ================================================== ===== > << The foregoing is intended for educational purposes only > << and does NOT constitute legal OR professional advice. > << > << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org. > << Copyright (2005) - All rights reserved. > << ================================================== ===== >