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Screaminghollow, a question
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Steve from TN    Posted 09-28-2004 at 09:07:21       [Reply]  [No Email]
I can't remember where you are, but I am sure you can give me some general advice. My nephew-in-law recently buried his mother in Pennsylvania which was her home. Before she died, she placed everything in his name and her name and left a will leaving him everything for good measure. As he is the only heir(only child),does he still need to have the will probated? He lives here in W. TN. I thank you for your help.


screaminghollow    Posted 09-29-2004 at 08:21:36       [Reply]  [No Email]
Re: death, probate and taxes.
It sort a depends. If truely everything was in joint names, it automatically passes at death to the remaining co-owner(s) That goes for real estate as well as personal items. The problem is that it is hard to prove that clothes, furniture, antiques and other non-titled items are in joint names. For personal items depending on value, it may be necessary to probate, get appraisals etc. I'm aware of one recent estate here in which the fella never had much in life, put all bank accoutns and real estate in joint names, and died leaving his household stuff. Just the antique card table brought over $20,000. It took three auctioneers two days to sell the "stuff" that wasn't taken to Sotheby's to sell. The personal "stuff" brought in excess of $500,000. Most folks don't have much of anything of value squirreled away when they die and it may be a pain to probate the stuff when they die, but technically required. Many states have streamlined probate procedures for small estates. I believe in Maryland there are two levels of small estates with very little hassle and no formal court proceedings to handle to smallest level of estate.
The question of where to probate is another question that can be tricky. Did she die where she had lived all her life? or was she moved to the son's residence for her last year or two? Was she in a nursing home in son's state long enough to be considered a resident there?
Next, TAXES, Because rich folks started giving away their assets just before death, most states got tired of being deprived of inheritance taxes and passed a law that presumes gifts made within a certain period of death are made in contemplation of death and inheritance and estate taxes are still due and owing, even though the asset, house, car etc, does not go through probate. In some states, it is as long as five years. So if Mom put her house in joint names, 4 years before her death, sonny might have to pay inheritance taxes on the whole thing. If she put it in joint names 6 yrs before death, he might have to pay inheritance tax on only the half he got when she died. If she just deeded the house entirely to him, he might have to pay inheritance tax on all or nothing depending on how long she lives after the deed.(4 or 6 yrs) The house is not part of the probate estate if in joint names at death, no executor's commission, or probate costs assessed on the house, but inheritance tax could still be a factor. A little estate planning can go a long way.
(from a strictly technical standpoint joint names doesn't always mean it goes to the survivor when one owner dies, there can be joint owners whose "share" can be sold separately and does go through probate. joint tenants, tenants in common, and with rights of survivorship or without rights of survivorship. (A tenancy by the entireties can only exist between a husband and wife (except possibly in Massachusetts in a gay marriage) and always has rights of survivorship)
A friend of mine's father died a lifelong resident of Maryland, but owning a big beach house in NC. Almost 10 years after the estate was probated and finished in Maryland, the state of NC wised up and sent a bill for inheritance taxes. By that time the beach house had been sold. The tax collector in NC threatened to put a lien on the beach house. Whether the lien would have been any good years after the house was sold, who knows. Whether NC will ever go after the heirs for the taxes that should have been paid, who knows. I suppose the chances of the heirs being found in NC is also slim.
It is possible that a potential buyer's mortgage company may want a release of taxes before lending on a property, depending on state law.
The banking laws in some states require banks to seal safe deposit boxes once a co-owner dies. They are not to be opened until an estate is opened and a state tax agent is present to inventory and value the contents. Even if the safe deposit box only has marbles in it.
Rather than put property in joint names, in a very special situation, I once wrote a deed to a lady's children, but reserved a life estate for her in the property. In other words, she gave the property to her kids, but kept the legal right to live there for the rest of her life. She lived longer than the time required for estate taxes and when she died the kids got the property free and clear of any estate or inheritance taxes.
Almost all states have their own quirks as to estate law. Some don't tax personal property in estates if the estate is probated elsewhere, and some do. Some times estates need to be set up in several states just to handle things properly. For instance, grandma passes away in a Nursing home in Maryland, leaving a house across the line in PA, a beach house in Ocean city, Md and still owned a quarter interest in some business property in her Indiana Birthplace. First where was she a resident? Does Pa, Md and Indiana tax the personal property in their borders at the time of death? do they tax the real estate? It can become the type of quagmire that alot of lawyers want to avoid or bill through the nose for handling.
So the answer, as to probate in Pa, may depend on where mom was a resident at death, what personal property was in PA at death, and how it was titled in joint names. Whether inheritance taxes are owed, could depend on when it was put in joint names and what state she was a resident of. For instance, Maryland may tax the transfer of the Pa property for inheritance taxes because at death, mom was a maryland resident. Pa might also tax the share inherited.
I am not an estate lawyer, but know enough to recognize that disposition of a decedent's property can get quite complicated for even small estates.


Maggie/TX    Posted 09-28-2004 at 16:04:56       [Reply]  [No Email]
I will be very interested to see the reply from Screaminghollow, as I know he's a lawyer. I think I got took back in '98 when my mom died. My dad died in '89 and when Mother died I was the ONLY heir, as I'm an only child. Everything was already in my name along with theirs except the house and the car but they had left wills that left me everything. I was told I HAD to have her will probated. This was in Alabama and I live in Texas. I was told the probate thing was to make sure there were no creditors outstanding. Hogwash! I knew doggone good and well what their bills were as I had been paying them for two months while Mother was sick and they didn't owe anybody a dime other than regular monthly stuff. I think I got took to the cleaners by this jakeleg lawyer in Alabama to the tune of several hundred dollars just to put the money in his pocket.


Steve from TN    Posted 09-28-2004 at 19:33:58       [Reply]  [No Email]
Maggie, I talked to an attorney at lunch. He said that Ned(NIL) does not have to have the will probated since everything is already in his name. It was half his before she died and is now all his. He put it this way; if I sold you a car before I died and willed it to someone else, it would still be your car. I would not need to will you something that was already in your name. It made sense to me. I called them and told them not to worry. I know nothing about Alabama, but when my parents died without wills, I ran a notice in the paper giving notice to creditors for maybe 4 consecutive weeks to bill the estates of my parents. I don't think that has anything to do with will probate. Take my thoughts with a grain of salt as I got my law degree the same place I got my medical degree(Readers Digest).


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