Gift Warranty Deed
If, before a person's death, a gift warranty deed is made to one of the heirs, giving them entitlement to 2/3 of the estate, does any debt left by the estate come out of that particular 2/3 or is it not shared by all before a split is made?
1 Answer from Attorneys
Re: Gift Warranty Deed
Was the deed recorded prior to death? If yes, then 1/3 transferred and estate debts (outside of any mortgage) would come out of the estate (2/3 + any other property). Keep in mind that the 1/3 grantee will have a higher capital gains tax since the property was granted prior to death and would not receive the benefit of the stepped-up basis that the inherited portion would have.