Legal Question in Wills and Trusts in Massachusetts
my mother is planning to transfer ownership of stock from her and my father (deceased) to her and me as joint tenants. regarding estate taxes, gift or inheritance taxes is this a better financial plan than to leave the stock in her and my father's names and for me to deal with the paper work when that time comes? what other questions should i be asking?
1 Answer from Attorneys
The stock cannot remain in your deceased father's name. If the stock was in a domestic company (the rules are different for foreign companies) -- When your father died the portion of his stock that passed to your mother got a stepped up basis to its fair market value on his death. This means that if they bought the stock for $10 and on his death it was valued at $100, the basis in the stock is now $55. If you mother gifts to you half of the stock, she is making a gift of $27.50. When a gift is given, the basis is carried forward. If the actual value of the gift if less than $13,000, she will not owe any gift tax on the transfer. If it is worth more than $13,000 she can use her $1 million gift tax exclusion (if she still has it to use) to offset the gift. If you and her own it as "joint tenants" on either your death or her death (whichever is first) it will automatically pass to the surviving joint tenant. To answer your question more fully, I suggest you speak with an estate planning or tax professional.