- quote -

Also you want to look at your state law.

To give you an example.... If I understand PA Inheritance
tax, generally, the entire account must be reported on the
inheritance tax return regardless of who contributed what.
Siblings are taxed at a rate of 12%.

<< ================================================== ===== > << 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. > << ================================================== ===== >

SLARRY[at]weizmann.weizmann.ac.il (Larry Israel) wrote:

- quote -

dding your sister will be considered a gift of half the
account value to her. Depending on the account value, you
may or may not have a gift tax liability.

- quote -

No, the account wouldn't be part of your probate estate.
The joint account holder gets the money 'by operation of
law'. An excellent "poor man's will" structure.

- quote -

Your half.

<< ================================================== ===== > << 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. > << ================================================== ===== >

"Larry Israel" <VSLARRY[at]weizmann.weizmann.ac.il> wrote:

- quote -

I never recommend what you are considering, for several
reasons, not the least of which is taxation issues.

The account will be subject to estate tax UNLESS the
beneficiary can prove that some of the money in the account
was put there by them. The IRS will assume that all
deposits were done by the primary account holder.

The account will LIKELY NOT have to go through probate. But
this will depend on several specifics. One is local law,
which you'll have to address with a local attorney. The
other is the specific manner in which you title the account.
There is joint tenants, which usually means that your share
will pass to your heirs - which may include your sister but
could also include others depending on local law. There is
joint tenants with rights of survivorship, which usually
means that the your share will pass to the other account
holders - again depending on local law.

What you didn't ask was about other liability issues. When
you have a joint account with a non-spouse you may also be
exposing that asset to legal claims asserted against the
other account holder. For example, in your case - if your
sister was sued and lost the plaintiff might be able to
seize some or all of the money in the joint account to
satisfy the judgment.

Generally, a safer way to handle this type of thing is to go
to bank and have your sister put on as a Courtesy Signator -
this gives her the right to sign checks for your benefit
only. If she signs checks to pay her own bills, she is
stealing. This usually establishes a legal boundary line
that keeps your money and your interest secure.

Then you can add her as a POD beneficiary on the account.
POD means Pay On Death. This will almost always avoid
probate.

You can seldom avoid estate tax if it is an issue. The best
way to do this is to meet with an estate planner and start a
program to give away what you need to now, while you're
alive, to reduce your estate so it will be below the estate
tax requirement at your death.

Good luck,
Gene E. Utterback, EA, RFC

<< ================================================== ===== > << 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. > << ================================================== ===== >

"Larry Israel" <VSLARRY[at]weizmann.weizmann.ac.il> wrote

- quote -

There would be no income tax issues to deal with.

- quote -

Not for probate if it's titled correctly, but it is included
in your taxable estate.

- quote -

Since it is a joint account, and if it is titled correctly,
she'll get the whole amount.

- quote -

Yes. It is part of your estate should you die tomorrow (but
please don't).

--
Paul Thomas, CPA
paulthomascpapc[at]bellsouth.net

<< ================================================== ===== > << 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. > << ================================================== ===== >

If, for convenience, I add my sister to my bank account to
make it a joint account, while keeping the Social Security
number for the account as mine, what are any taxable
problems should one of us die? Would the account be part of
the estate for probate, or would the survivor just get to
keep the money? If the federal estate tax pops back again in
2010 or so, what part of the money would be considered part
of the decedent's estate?

<< ================================================== ===== > << 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. > << ================================================== ===== >