Legal Question in Wills and Trusts in Illinois

shall be paid by the by the person holding or receiving that property

My mother in law has passed and in her trust it states that the estate should pay bills,costs and claims etc.. then continues

'' except that amount, if any, by which the estate and inheritance taxes taxes shall be increased as a result of the inclusion of property in which I may have a qualifying income interest for life or over which I may have a power of appointment shall be paid by the person holding or receiving that property.''

The issue is this, There are 2 daughters. One was to get the house, then they were to split the estate 50/50. The daughter getting the house, wants to value the house at $500,000. This will put the estate over the $2 million level thus causing estate taxes to be due on the overage, as well as additional fees to file the estate taxes.

A reasonable valuation would be $340,000 considering this market, but she still wants to raise the declared value to protect herself from capital gains in the future.

The point is, does the wording above specify that since the raised value of the house would push the estate over the $2 million level, is the daughter with the house responsible for the additional taxes?

Or does the daughter without the house need to pay half of these increased taxes.

Thanks


Asked on 11/17/08, 9:37 pm

1 Answer from Attorneys

Motty Stone Law Offices of Motty Stone

Re: shall be paid by the by the person holding or receiving that property

Absent a clause to the contrary, everyone splits taxes. Sounds like it may be time for an independent appraisal or an agreement that the one taking the house will cover the taxes.

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Answered on 11/17/08, 9:41 pm


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