How should I handle my elderly mother's accounts that have my name on them?

Question

My elderly mother (who is bedridden) had put my name on quite a few of her bank accounts (they are held jojntly now) so that I may conduct her business (I am also named POA), I know this will affect my daughter's chances for financial aid for college (she is a junior in HS)but how should this be handled when my mom passes away? I have a number of siblings and don't care to "take it all for myself" but wouldn't it count as a "gift" if I turned it over to her estate and then what are the tax implications for us all? How can we straighten this out?

Answer 1

If the estate is under 698,000 there is no tax on it.  If it is over 698,000 then disburse some of the funds before her death to the siblings but leave enough to take care of her.  She can give a gift to each child of $10,000 a year.  The accounts really should be marked for pay on death instead of having them held jointly unless she is not mentally able to handle her own affairs.  That way they really aren't in your name and your childs college won't be affected.

Answer 2

The best thing to do is have a living trust made up before she passes away, because if she owns property and has money it will all go to an estate and the government will make sure to get a nice tax cut from it.  If you put it in a trust it won't be tied up as long and there isn't the tax penalty as well.  I am in real estate and have seen many homes get tied up for quite some time in an estate.  When she makes the trust you can implement who gets what and how much and so on.  So Sorry to hear about your Mom.  Good Luck!

Answer 3

There are many issues to consider.  

If she still has assets in her name then she wouldn't be able to get full Medicare coverage.

To avoid gift tax, she could gift every sibling $12k a year.  $12k is the maximum gift per person without triggering gift tax.  You can all agree to keep that "gift" aside for her care until she passes.  

If the house is in your name, then it is not part of her estate.

Make sure there are beneficiary designations on all her accounts to avoid probate.

I suspect the situation is a bit more involved than what you've described.  I would suggest that you hire a hourly planner who is familiar with estate planning and your local law.  You can find an hourly planner in your area at Garrett Network http://www.garrettplanningnetwork.com/in...

Best wishes.