(OT) Rant Mom's Estate - a Cautionary Tale
 

It's almost done. I got notification from the Probate Court stating as far
as they are concerned the estate is settled. So I met with a guy at H&R
Block last Thursday to work on her final tax form (Form 1041). That's going
to cost me $300. The process seems a little backwards to me; seems like
that should be paid by the estate. But the monies from the estate have
already been distributed. That had to be done before the Probate Court
would say it was settled, and this form can't be filed until after the
Probate Court says it's done. My oldest brother has agreed to help me pay
for this tax filing. (Obviously I'm not going to get a dime from the other
brother, who did nothing but bitch because I wouldn't sell the house and
give him more money.)

But that's not what I'm upset about. Dad had an annuity and Mom was the
beneficiary. After he died she had to name another beneficiary. She did:
Me. The guy at H&R Block said I needed to call the IRS, ASAP, because the
company withheld 10% taxes on $153,000 under MY social security number
before issuing the check.

I spent hours on the phone with the IRS yesterday, talked with at least 6
different people. (In all fairness, they really did try to help, even
checking to see if I could issue 1099's to my brothers for their share... no
go.) Apparently Mom should have specified all three of us as beneficiaries,
or at the very least listed her Estate as the beneficiary. Mom didn't know
any better. And I'm sure when she did this she wasn't thinking about dying.

Anyway, per the terms of her Will, I split the payout with my brothers.
That's the problem. There's still an additional 10% that will be owed the
IRS. As far as the IRS is concerned I received all the money, so I'll have
to pay them (roughly) another $16,500! (Total estimated tax liability on
the total annuity, per the IRS, is $33,000). So... each of my brothers
received (rounded figures) close to $50,000 tax free. After I pay the
additional taxes, basically I got SQUAT.

It's not fair! I'm the one who has been doing all the friggin work. From
the moment I arrived here in 2007 when both parents were still alive, I took
care of them. And I've been working on all the estate-related paperwork for
the past year. I should have just kept the damn money, but I was trying to
do what Mom wanted, you know?

I know darned good and well my brothers aren't going to pitch in to help me
with this tax burden, not even the one I still get along with. I called her
attorney who said he didn't know of anything I could do about it. He said,
"You tried to do the right thing. You did what she wanted and it looks like
you got burned." No kidding! His paralegal called me back later yesterday
afternoon and gave me the name of a CPA they work with to see if he might be
able to find a way to help with this. The CPA is on vacation for a week...
even so, I can't pay a CPA on top of all of this! Needless to say I'm very
upset.

So folks... if you have anything like an annuity or other investments that
require you to name a beneficiary, don't name an INDIVIDUAL if you intend
the money be split among heirs. Otherwise that one person will be royally
screwed.

Jill

(OT) Rant Mom's Estate - a Cautionary Tale
 

"jmcquown" wrote in message
...
It's almost done. I got notification from the Probate Court stating as
far as they are concerned the estate is settled. So I met with a guy at
H&R Block last Thursday to work on her final tax form (Form 1041). That's
going to cost me $300. The process seems a little backwards to me; seems
like that should be paid by the estate. But the monies from the estate
have already been distributed. That had to be done before the Probate
Court would say it was settled, and this form can't be filed until after
the Probate Court says it's done. My oldest brother has agreed to help me
pay for this tax filing. (Obviously I'm not going to get a dime from the
other brother, who did nothing but bitch because I wouldn't sell the house
and give him more money.)

But that's not what I'm upset about. Dad had an annuity and Mom was the
beneficiary. After he died she had to name another beneficiary. She did:
Me. The guy at H&R Block said I needed to call the IRS, ASAP, because the
company withheld 10% taxes on $153,000 under MY social security number
before issuing the check.

I spent hours on the phone with the IRS yesterday, talked with at least 6
different people. (In all fairness, they really did try to help, even
checking to see if I could issue 1099's to my brothers for their share...
no go.) Apparently Mom should have specified all three of us as
beneficiaries, or at the very least listed her Estate as the beneficiary.
Mom didn't know any better. And I'm sure when she did this she wasn't
thinking about dying.

Anyway, per the terms of her Will, I split the payout with my brothers.
That's the problem. There's still an additional 10% that will be owed the
IRS. As far as the IRS is concerned I received all the money, so I'll
have to pay them (roughly) another $16,500! (Total estimated tax
liability on the total annuity, per the IRS, is $33,000). So... each of
my brothers received (rounded figures) close to $50,000 tax free. After I
pay the additional taxes, basically I got SQUAT.

It's not fair! I'm the one who has been doing all the friggin work. From
the moment I arrived here in 2007 when both parents were still alive, I
took care of them. And I've been working on all the estate-related
paperwork for the past year. I should have just kept the damn money, but
I was trying to do what Mom wanted, you know?

I know darned good and well my brothers aren't going to pitch in to help
me with this tax burden, not even the one I still get along with. I
called her attorney who said he didn't know of anything I could do about
it. He said, "You tried to do the right thing. You did what she wanted
and it looks like you got burned." No kidding! His paralegal called me
back later yesterday afternoon and gave me the name of a CPA they work
with to see if he might be able to find a way to help with this. The CPA
is on vacation for a week... even so, I can't pay a CPA on top of all of
this! Needless to say I'm very upset.

So folks... if you have anything like an annuity or other investments that
require you to name a beneficiary, don't name an INDIVIDUAL if you intend
the money be split among heirs. Otherwise that one person will be royally
screwed.

Jill

Your last paragraph is good advice. In fact, anyone named as beneficiary is
normally expected to be the beneficiary of that account, and that is totally
separate from people named in the will. You can even name 40% to one
person, 40% to another, and 20% to the estate for other distributions (just
an example). But money listed for a beneficiary (other than the estate) is
not included in bequests made in the will. The same is true for insurance
policies--money goes directly to the beneficiary (and the estate can be
one), and it is not calculated when distributing money per the will. I am
also surprised that only 10% was held back for taxes. That normally is a
minimum of 20%.

I'm sorry you are having to go through this. On the brighter side, you did
get one very important (and valuable) item that went directly to you, and
that was the house. It is not a liquid asset and does not help with the
payment of taxes, but it is an asset that does not have to be shared.

MaryL

(OT) Rant Mom's Estate - a Cautionary Tale
 

"MaryL" -OUT-THE-LITTER wrote in message
. ..

"jmcquown" wrote in message
...
It's almost done. I got notification from the Probate Court stating as
far as they are concerned the estate is settled. So I met with a guy at
H&R Block last Thursday to work on her final tax form (Form 1041).
That's going to cost me $300. The process seems a little backwards to
me; seems like that should be paid by the estate. But the monies from
the estate have already been distributed. That had to be done before the
Probate Court would say it was settled, and this form can't be filed
until after the Probate Court says it's done. My oldest brother has
agreed to help me pay for this tax filing. (Obviously I'm not going to
get a dime from the other brother, who did nothing but bitch because I
wouldn't sell the house and give him more money.)

But that's not what I'm upset about. Dad had an annuity and Mom was the
beneficiary. After he died she had to name another beneficiary. She
did: Me. The guy at H&R Block said I needed to call the IRS, ASAP,
because the company withheld 10% taxes on $153,000 under MY social
security number before issuing the check.


Jill

Your last paragraph is good advice. In fact, anyone named as beneficiary
is normally expected to be the beneficiary of that account, and that is
totally separate from people named in the will. You can even name 40% to
one person, 40% to another, and 20% to the estate for other distributions
(just an example). But money listed for a beneficiary (other than the
estate) is not included in bequests made in the will. The same is true
for insurance policies--money goes directly to the beneficiary (and the
estate can be one), and it is not calculated when distributing money per
the will. I am also surprised that only 10% was held back for taxes.
That normally is a minimum of 20%.

I'm sorry you are having to go through this. On the brighter side, you
did get one very important (and valuable) item that went directly to you,
and that was the house. It is not a liquid asset and does not help with
the payment of taxes, but it is an asset that does not have to be shared.

MaryL


Now I really *will* appear to be the bearer of bad tidings, on top of my
previous message. However, I just re-read the part of your message where
you were named the beneficiary and then you distributed that money among the
three of you. The reason it was reported under your Social Security number,
of course, is that you were the legal beneficiary. However, the part that
concerns me is that you may have gone *above* the maximum limit for tax-free
gifts. Unless it has changed, you could give $12,000 per year to each
person without federal tax consequences. Anything above that would be
taxable, and the *donor* is usually responsible for that tax. I am speaking
as someone with no legal training, of course, but I am concerned that there
may be some extra tax consequences as a result of that. I think you would
be wise to ask a professional about that. You might even be able to check
with H&R Block without any additional cost since they prepared the form, but
this is something that would probably come out when you prepare your *own*
taxes since it's a consequence of your gift rather than one legally coming
from your mother. One thing I had my mother do when she was living with me
was that she listed the three of us equally as beneficiaries with POD
(payment on death). I knew that was how she had us listed in her will, but
I also knew that people listed as beneficieries would receive that money
directly instead of theough the estate.The exception was one account where
she named herself and me as joint owners. Since it was really her money, I
felt that it should be divided. So, I divided that among us in way her will
specified for anything that might not have been covered. However, I did
hold a portion until her final tax papers were filed. I explained that to
my sister and brother and told them that I was holding it for possible tax
payments. I was a lot more fortunate than you--*much* less money was
involved for us and did not go above the "giftable" limit, but my brother
and sister were always fully supportive of everything I did. In fact, they
insisted that I keep some extra for myself for all the work I did.
Incidentally, another advantage of following the advice in your last
paragraph is that money that is paid directly to beneficiaries does not go
through probate, and there is no attorney fee attached to it. (...again,
speaking from experience and *not* as a person with any legal training--and
therefore cannot give legal advice)

MaryL

(OT) Rant Mom's Estate - a Cautionary Tale
 

"MaryL" -OUT-THE-LITTER wrote in message
. ..

"MaryL" -OUT-THE-LITTER wrote in message
. ..

"jmcquown" wrote in message
...
It's almost done. I got notification from the Probate Court stating as
far as they are concerned the estate is settled. So I met with a guy at
H&R Block last Thursday to work on her final tax form (Form 1041).
That's going to cost me $300. The process seems a little backwards to
me; seems like that should be paid by the estate. But the monies from
the estate have already been distributed. That had to be done before
the Probate Court would say it was settled, and this form can't be filed
until after the Probate Court says it's done. My oldest brother has
agreed to help me pay for this tax filing. (Obviously I'm not going to
get a dime from the other brother, who did nothing but bitch because I
wouldn't sell the house and give him more money.)

But that's not what I'm upset about. Dad had an annuity and Mom was the
beneficiary. After he died she had to name another beneficiary. She
did: Me. The guy at H&R Block said I needed to call the IRS, ASAP,
because the company withheld 10% taxes on $153,000 under MY social
security number before issuing the check.


Jill

Your last paragraph is good advice. In fact, anyone named as beneficiary
is normally expected to be the beneficiary of that account, and that is
totally separate from people named in the will. You can even name 40% to
one person, 40% to another, and 20% to the estate for other distributions
(just an example). But money listed for a beneficiary (other than the
estate) is not included in bequests made in the will. The same is true
for insurance policies--money goes directly to the beneficiary (and the
estate can be one), and it is not calculated when distributing money per
the will. I am also surprised that only 10% was held back for taxes.
That normally is a minimum of 20%.

I'm sorry you are having to go through this. On the brighter side, you
did get one very important (and valuable) item that went directly to you,
and that was the house. It is not a liquid asset and does not help with
the payment of taxes, but it is an asset that does not have to be shared.

MaryL


Now I really *will* appear to be the bearer of bad tidings, on top of my
previous message. However, I just re-read the part of your message where
you were named the beneficiary and then you distributed that money among
the three of you. The reason it was reported under your Social Security
number, of course, is that you were the legal beneficiary. However, the
part that concerns me is that you may have gone *above* the maximum limit
for tax-free gifts. Unless it has changed, you could give $12,000 per
year to each person without federal tax consequences. Anything above that
would be taxable, and the *donor* is usually responsible for that tax. I
am speaking as someone with no legal training, of course, but I am
concerned that there may be some extra tax consequences as a result of
that. I think you would be wise to ask a professional about that. You
might even be able to check with H&R Block without any additional cost
since they prepared the form, but this is something that would probably
come out when you prepare your *own* taxes since it's a consequence of
your gift rather than one legally coming from your mother. One thing I
had my mother do when she was living with me was that she listed the three
of us equally as beneficiaries with POD (payment on death).


Her bank accounts and other investments were all listed as POD. It was just
this stupid annuity that wasn't.

I knew that was how she had us listed in her will, but I also knew that
people listed as beneficieries would receive that money directly instead
of theough the estate.The exception was one account where she named
herself and me as joint owners. Since it was really her money, I felt
that it should be divided. So, I divided that among us in way her will
specified for anything that might not have been covered. However, I did
hold a portion until her final tax papers were filed. I explained that to
my sister and brother and told them that I was holding it for possible tax
payments. I was a lot more fortunate than you--*much* less money was
involved for us and did not go above the "giftable" limit, but my brother
and sister were always fully supportive of everything I did. In fact,
they insisted that I keep some extra for myself for all the work I did.
Incidentally, another advantage of following the advice in your last
paragraph is that money that is paid directly to beneficiaries does not go
through probate, and there is no attorney fee attached to it. (...again,
speaking from experience and *not* as a person with any legal
training--and therefore cannot give legal advice)

MaryL

Per the IRS, the "gift limit" is $1 million dollars. The IRS made sure I
knew about that when I talked to them. This came nowhere near hitting a
million dollars, but I'm still responsible for the taxes on that friggin
annuity. I'm not planning on making any gifts. But thanks for the info for
other people in the U.S. who may run into this situation.

Jill

(OT) Rant Mom's Estate - a Cautionary Tale
 

"jmcquown" wrote in message
...
"MaryL" -OUT-THE-LITTER wrote in message
. ..

"MaryL" -OUT-THE-LITTER wrote in message
. ..

"jmcquown" wrote in message
...
It's almost done. I got notification from the Probate Court stating as
far as they are concerned the estate is settled. So I met with a guy
at H&R Block last Thursday to work on her final tax form (Form 1041).
That's going to cost me $300. The process seems a little backwards to
me; seems like that should be paid by the estate. But the monies from
the estate have already been distributed. That had to be done before
the Probate Court would say it was settled, and this form can't be
filed until after the Probate Court says it's done. My oldest brother
has agreed to help me pay for this tax filing. (Obviously I'm not
going to get a dime from the other brother, who did nothing but bitch
because I wouldn't sell the house and give him more money.)

But that's not what I'm upset about. Dad had an annuity and Mom was
the beneficiary. After he died she had to name another beneficiary.
She did: Me. The guy at H&R Block said I needed to call the IRS, ASAP,
because the company withheld 10% taxes on $153,000 under MY social
security number before issuing the check.


Jill

Your last paragraph is good advice. In fact, anyone named as
beneficiary is normally expected to be the beneficiary of that account,
and that is totally separate from people named in the will. You can
even name 40% to one person, 40% to another, and 20% to the estate for
other distributions (just an example). But money listed for a
beneficiary (other than the estate) is not included in bequests made in
the will. The same is true for insurance policies--money goes directly
to the beneficiary (and the estate can be one), and it is not calculated
when distributing money per the will. I am also surprised that only 10%
was held back for taxes. That normally is a minimum of 20%.

I'm sorry you are having to go through this. On the brighter side, you
did get one very important (and valuable) item that went directly to
you, and that was the house. It is not a liquid asset and does not help
with the payment of taxes, but it is an asset that does not have to be
shared.

MaryL


Now I really *will* appear to be the bearer of bad tidings, on top of my
previous message. However, I just re-read the part of your message where
you were named the beneficiary and then you distributed that money among
the three of you. The reason it was reported under your Social Security
number, of course, is that you were the legal beneficiary. However, the
part that concerns me is that you may have gone *above* the maximum limit
for tax-free gifts. Unless it has changed, you could give $12,000 per
year to each person without federal tax consequences. Anything above
that would be taxable, and the *donor* is usually responsible for that
tax. I am speaking as someone with no legal training, of course, but I
am concerned that there may be some extra tax consequences as a result of
that. I think you would be wise to ask a professional about that. You
might even be able to check with H&R Block without any additional cost
since they prepared the form, but this is something that would probably
come out when you prepare your *own* taxes since it's a consequence of
your gift rather than one legally coming from your mother. One thing I
had my mother do when she was living with me was that she listed the
three of us equally as beneficiaries with POD (payment on death).


Her bank accounts and other investments were all listed as POD. It was
just this stupid annuity that wasn't.

I knew that was how she had us listed in her will, but I also knew that
people listed as beneficieries would receive that money directly instead
of theough the estate.The exception was one account where she named
herself and me as joint owners. Since it was really her money, I felt
that it should be divided. So, I divided that among us in way her will
specified for anything that might not have been covered. However, I did
hold a portion until her final tax papers were filed. I explained that
to my sister and brother and told them that I was holding it for possible
tax payments. I was a lot more fortunate than you--*much* less money was
involved for us and did not go above the "giftable" limit, but my brother
and sister were always fully supportive of everything I did. In fact,
they insisted that I keep some extra for myself for all the work I did.
Incidentally, another advantage of following the advice in your last
paragraph is that money that is paid directly to beneficiaries does not
go through probate, and there is no attorney fee attached to it.
(...again, speaking from experience and *not* as a person with any legal
training--and therefore cannot give legal advice)

MaryL

Per the IRS, the "gift limit" is $1 million dollars. The IRS made sure I
knew about that when I talked to them. This came nowhere near hitting a
million dollars, but I'm still responsible for the taxes on that friggin
annuity. I'm not planning on making any gifts. But thanks for the info
for other people in the U.S. who may run into this situation.

Jill
Doesn't the $1 million actually apply to money coming directly from an
estate but not to a gift given by an individual? From your description, it
sounds like yours is a gift from you and not from the estate? I'm
definitely not an expert in this area, and you have already checked with
IRS. Here's an article describing part of what I was discussing:
http://www.fairmark.com/begin/gifts.htm

MaryL

(OT) Rant Mom's Estate - a Cautionary Tale
 

On Oct 31, 8:58*am, "MaryL" -OUT-THE-LITTER
wrote:
"jmcquown" wrote in message

...



"MaryL" -OUT-THE-LITTER wrote in message
...

"MaryL" -OUT-THE-LITTER wrote in message
t...

"jmcquown" wrote in message
...
It's almost done. *I got notification from the Probate Court stating as
far as they are concerned the estate is settled. *So I met with a guy
at H&R Block last Thursday to work on her final tax form (Form 1041)..
That's going to cost me $300. *The process seems a little backwards to
me; seems like that should be paid by the estate. *But the monies from
the estate have already been distributed. *That had to be done before
the Probate Court would say it was settled, and this form can't be
filed until after the Probate Court says it's done. *My oldest brother
has agreed to help me pay for this tax filing. *(Obviously I'm not
going to get a dime from the other brother, who did nothing but bitch
because I wouldn't sell the house and give him more money.)

But that's not what I'm upset about. *Dad had an annuity and Mom was
the beneficiary. *After he died she had to name another beneficiary.
She did: Me. *The guy at H&R Block said I needed to call the IRS, ASAP,
because the company withheld 10% taxes on $153,000 under MY social
security number before issuing the check.

Jill

Your last paragraph is good advice. *In fact, anyone named as
beneficiary is normally expected to be the beneficiary of that account,
and that is totally separate from people named in the will. *You can
even name 40% to one person, 40% to another, and 20% to the estate for
other distributions (just an example). *But money listed for a
beneficiary (other than the estate) is not included in bequests made in
the will. *The same is true for insurance policies--money goes directly
to the beneficiary (and the estate can be one), and it is not calculated
when distributing money per the will. *I am also surprised that only 10%
was held back for taxes. That normally is a minimum of 20%.

I'm sorry you are having to go through this. *On the brighter side, you
did get one very important (and valuable) item that went directly to
you, and that was the house. *It is not a liquid asset and does not help
with the payment of taxes, but it is an asset that does not have to be
shared.

MaryL

Now I really *will* appear to be the bearer of bad tidings, on top of my
previous message. *However, I just re-read the part of your message where
you were named the beneficiary and then you distributed that money among
the three of you. *The reason it was reported under your Social Security
number, of course, is that you were the legal beneficiary. *However, the
part that concerns me is that you may have gone *above* the maximum limit
for tax-free gifts. *Unless it has changed, you could give $12,000 per
year to each person without federal tax consequences. *Anything above
that would be taxable, and the *donor* is usually responsible for that
tax. *I am speaking as someone with no legal training, of course, but I
am concerned that there may be some extra tax consequences as a result of
that. *I think you would be wise to ask a professional about that. *You
might even be able to check with H&R Block without any additional cost
since they prepared the form, but this is something that would probably
come out when you prepare your *own* taxes since it's a consequence of
your gift rather than one legally coming from your mother. *One thing I
had my mother do when she was living with me was that she listed the
three of us equally as beneficiaries with POD (payment on death).

Her bank accounts and other investments were all listed as POD. *It was
just this stupid annuity that wasn't.

*I knew that was how she had us listed in her will, but I also knew that
people listed as beneficieries would receive that money directly instead
of theough the estate.The exception was one account where she named
herself and me as joint owners. *Since it was really her money, I felt
that it should be divided. *So, I divided that among us in way her will
specified for anything that might not have been covered. *However, I did
hold a portion until her final tax papers were filed. *I explained that
to my sister and brother and told them that I was holding it for possible
tax payments. *I was a lot more fortunate than you--*much* less money was
involved for us and did not go above the "giftable" limit, but my brother
and sister were always fully supportive of everything I did. *In fact,
they insisted that I keep some extra for myself for all the work I did..
Incidentally, another advantage of following the advice in your last
paragraph is that money that is paid directly to beneficiaries does not
go through probate, and there is no attorney fee attached to it.
(...again, speaking from experience and *not* as a person with any legal
training--and therefore cannot give legal advice)

MaryL

Per the IRS, the "gift limit" is $1 million dollars. *The IRS made sure I
knew about that when I talked to them. *This came nowhere near hitting a
million dollars, but I'm still responsible for the taxes on that friggin
annuity. *I'm not planning on making any gifts. *But thanks for the info
for other people in the U.S. who may run into this situation.

Jill

Doesn't the $1 million actually apply to money coming directly from an
estate but not to a gift given by an individual? *From your description, it
sounds like yours is a gift from you and not from the estate? *I'm
definitely not an expert in this area, and you have already checked with
IRS. *Here's an article describing part of what I was discussing:http://www.fairmark.com/begin/gifts.htm

MaryL- Hide quoted text -

- Show quoted text -

FYI -- An interesting bit of trivia I read the other day.

If the wealth of the entire world were equally distributed among the
planet's inhabitants -- that is, if every man, woman and child
received
a disbursement that would equal all the money in the world, can you
guess how much it would be?

$9,000. Nine thousand dollars.

Kind of puts things in perspective, doesn't it?

Sherry

(OT) Rant Mom's Estate - a Cautionary Tale
 

Sherry wrote:
On Oct 31, 8:58 am, "MaryL" -OUT-THE-LITTER
wrote:
"jmcquown" wrote in message

...



"MaryL" -OUT-THE-LITTER wrote in message
. ..
"MaryL" -OUT-THE-LITTER wrote in message
. ..
"jmcquown" wrote in message
...
It's almost done. I got notification from the Probate Court stating as
far as they are concerned the estate is settled. So I met with a guy
at H&R Block last Thursday to work on her final tax form (Form 1041).
That's going to cost me $300. The process seems a little backwards to
me; seems like that should be paid by the estate. But the monies from
the estate have already been distributed. That had to be done before
the Probate Court would say it was settled, and this form can't be
filed until after the Probate Court says it's done. My oldest brother
has agreed to help me pay for this tax filing. (Obviously I'm not
going to get a dime from the other brother, who did nothing but bitch
because I wouldn't sell the house and give him more money.)
But that's not what I'm upset about. Dad had an annuity and Mom was
the beneficiary. After he died she had to name another beneficiary.
She did: Me. The guy at H&R Block said I needed to call the IRS, ASAP,
because the company withheld 10% taxes on $153,000 under MY social
security number before issuing the check.
Jill
Your last paragraph is good advice. In fact, anyone named as
beneficiary is normally expected to be the beneficiary of that account,
and that is totally separate from people named in the will. You can
even name 40% to one person, 40% to another, and 20% to the estate for
other distributions (just an example). But money listed for a
beneficiary (other than the estate) is not included in bequests made in
the will. The same is true for insurance policies--money goes directly
to the beneficiary (and the estate can be one), and it is not calculated
when distributing money per the will. I am also surprised that only 10%
was held back for taxes. That normally is a minimum of 20%.
I'm sorry you are having to go through this. On the brighter side, you
did get one very important (and valuable) item that went directly to
you, and that was the house. It is not a liquid asset and does not help
with the payment of taxes, but it is an asset that does not have to be
shared.
MaryL
Now I really *will* appear to be the bearer of bad tidings, on top of my
previous message. However, I just re-read the part of your message where
you were named the beneficiary and then you distributed that money among
the three of you. The reason it was reported under your Social Security
number, of course, is that you were the legal beneficiary. However, the
part that concerns me is that you may have gone *above* the maximum limit
for tax-free gifts. Unless it has changed, you could give $12,000 per
year to each person without federal tax consequences. Anything above
that would be taxable, and the *donor* is usually responsible for that
tax. I am speaking as someone with no legal training, of course, but I
am concerned that there may be some extra tax consequences as a result of
that. I think you would be wise to ask a professional about that. You
might even be able to check with H&R Block without any additional cost
since they prepared the form, but this is something that would probably
come out when you prepare your *own* taxes since it's a consequence of
your gift rather than one legally coming from your mother. One thing I
had my mother do when she was living with me was that she listed the
three of us equally as beneficiaries with POD (payment on death).
Her bank accounts and other investments were all listed as POD. It was
just this stupid annuity that wasn't.
I knew that was how she had us listed in her will, but I also knew that
people listed as beneficieries would receive that money directly instead
of theough the estate.The exception was one account where she named
herself and me as joint owners. Since it was really her money, I felt
that it should be divided. So, I divided that among us in way her will
specified for anything that might not have been covered. However, I did
hold a portion until her final tax papers were filed. I explained that
to my sister and brother and told them that I was holding it for possible
tax payments. I was a lot more fortunate than you--*much* less money was
involved for us and did not go above the "giftable" limit, but my brother
and sister were always fully supportive of everything I did. In fact,
they insisted that I keep some extra for myself for all the work I did.
Incidentally, another advantage of following the advice in your last
paragraph is that money that is paid directly to beneficiaries does not
go through probate, and there is no attorney fee attached to it.
(...again, speaking from experience and *not* as a person with any legal
training--and therefore cannot give legal advice)
MaryL
Per the IRS, the "gift limit" is $1 million dollars. The IRS made sure I
knew about that when I talked to them. This came nowhere near hitting a
million dollars, but I'm still responsible for the taxes on that friggin
annuity. I'm not planning on making any gifts. But thanks for the info
for other people in the U.S. who may run into this situation.
Jill
Doesn't the $1 million actually apply to money coming directly from an
estate but not to a gift given by an individual? From your description, it
sounds like yours is a gift from you and not from the estate? I'm
definitely not an expert in this area, and you have already checked with
IRS. Here's an article describing part of what I was discussing:http://www.fairmark.com/begin/gifts.htm

MaryL- Hide quoted text -

- Show quoted text -

FYI -- An interesting bit of trivia I read the other day.

If the wealth of the entire world were equally distributed among the
planet's inhabitants -- that is, if every man, woman and child
received
a disbursement that would equal all the money in the world, can you
guess how much it would be?

$9,000. Nine thousand dollars.

Kind of puts things in perspective, doesn't it?

Sherry



Frankly, I a, surprized it is that much. There are so many who have
absolutely nothing.

(OT) Rant Mom's Estate - a Cautionary Tale
 

"jmcquown" wrote in message
...
"MaryL" -OUT-THE-LITTER wrote in message
. ..

"MaryL" -OUT-THE-LITTER wrote in message
. ..

"jmcquown" wrote in message
...
It's almost done. I got notification from the Probate Court
stating as far as they are concerned the estate is settled. So
I met with a guy at H&R Block last Thursday to work on her
final tax form (Form 1041). That's going to cost me $300. The
process seems a little backwards to me; seems like that should
be paid by the estate. But the monies from the estate have
already been distributed. That had to be done before the
Probate Court would say it was settled, and this form can't be
filed until after the Probate Court says it's done. My oldest
brother has agreed to help me pay for this tax filing.
(Obviously I'm not going to get a dime from the other brother,
who did nothing but bitch because I wouldn't sell the house and
give him more money.)

But that's not what I'm upset about. Dad had an annuity and
Mom was the beneficiary. After he died she had to name another
beneficiary. She did: Me. The guy at H&R Block said I needed
to call the IRS, ASAP, because the company withheld 10% taxes
on $153,000 under MY social security number before issuing the
check.


Jill

Your last paragraph is good advice. In fact, anyone named as
beneficiary is normally expected to be the beneficiary of that
account, and that is totally separate from people named in the
will. You can even name 40% to one person, 40% to another, and
20% to the estate for other distributions (just an example).
But money listed for a beneficiary (other than the estate) is
not included in bequests made in the will. The same is true for
insurance policies--money goes directly to the beneficiary (and
the estate can be one), and it is not calculated when
distributing money per the will. I am also surprised that only
10% was held back for taxes. That normally is a minimum of 20%.

I'm sorry you are having to go through this. On the brighter
side, you did get one very important (and valuable) item that
went directly to you, and that was the house. It is not a
liquid asset and does not help with the payment of taxes, but it
is an asset that does not have to be shared.

MaryL


Now I really *will* appear to be the bearer of bad tidings, on
top of my previous message. However, I just re-read the part of
your message where you were named the beneficiary and then you
distributed that money among the three of you. The reason it was
reported under your Social Security number, of course, is that
you were the legal beneficiary. However, the part that concerns
me is that you may have gone *above* the maximum limit for
tax-free gifts. Unless it has changed, you could give $12,000
per year to each person without federal tax consequences.
Anything above that would be taxable, and the *donor* is usually
responsible for that tax. I am speaking as someone with no legal
training, of course, but I am concerned that there may be some
extra tax consequences as a result of that. I think you would be
wise to ask a professional about that. You might even be able to
check with H&R Block without any additional cost since they
prepared the form, but this is something that would probably come
out when you prepare your *own* taxes since it's a consequence of
your gift rather than one legally coming from your mother. One
thing I had my mother do when she was living with me was that she
listed the three of us equally as beneficiaries with POD (payment
on death).


Her bank accounts and other investments were all listed as POD.
It was just this stupid annuity that wasn't.

I knew that was how she had us listed in her will, but I also
knew that people listed as beneficieries would receive that money
directly instead of theough the estate.The exception was one
account where she named herself and me as joint owners. Since it
was really her money, I felt that it should be divided. So, I
divided that among us in way her will specified for anything that
might not have been covered. However, I did hold a portion until
her final tax papers were filed. I explained that to my sister
and brother and told them that I was holding it for possible tax
payments. I was a lot more fortunate than you--*much* less money
was involved for us and did not go above the "giftable" limit,
but my brother and sister were always fully supportive of
everything I did. In fact, they insisted that I keep some extra
for myself for all the work I did. Incidentally, another
advantage of following the advice in your last paragraph is that
money that is paid directly to beneficiaries does not go through
probate, and there is no attorney fee attached to it. (...again,
speaking from experience and *not* as a person with any legal
training--and therefore cannot give legal advice)

MaryL

Per the IRS, the "gift limit" is $1 million dollars. The IRS made
sure I knew about that when I talked to them. This came nowhere
near hitting a million dollars, but I'm still responsible for the
taxes on that friggin annuity. I'm not planning on making any
gifts. But thanks for the info for other people in the U.S. who
may run into this situation.

Jill

You are correct. That is the lifetime gift limit. The lower (I
think its more than $12,000 now) limit is what you can give to
someone in a year without cutting into your lifetime limit. As you
said, shouldn't be a problem.

Jo

(OT) Rant Mom's Estate - a Cautionary Tale
 

On Oct 31, 11:14*am, MLB wrote:
Sherry wrote:
On Oct 31, 8:58 am, "MaryL" -OUT-THE-LITTER
wrote:
"jmcquown" wrote in message

...

"MaryL" -OUT-THE-LITTER wrote in message
et...
"MaryL" -OUT-THE-LITTER wrote in message
. net...
"jmcquown" wrote in message
...
It's almost done. *I got notification from the Probate Court stating as
far as they are concerned the estate is settled. *So I met with a guy
at H&R Block last Thursday to work on her final tax form (Form 1041).
That's going to cost me $300. *The process seems a little backwards to
me; seems like that should be paid by the estate. *But the monies from
the estate have already been distributed. *That had to be done before
the Probate Court would say it was settled, and this form can't be
filed until after the Probate Court says it's done. *My oldest brother
has agreed to help me pay for this tax filing. *(Obviously I'm not
going to get a dime from the other brother, who did nothing but bitch
because I wouldn't sell the house and give him more money.)
But that's not what I'm upset about. *Dad had an annuity and Mom was
the beneficiary. *After he died she had to name another beneficiary.
She did: Me. *The guy at H&R Block said I needed to call the IRS, ASAP,
because the company withheld 10% taxes on $153,000 under MY social
security number before issuing the check.
Jill
Your last paragraph is good advice. *In fact, anyone named as
beneficiary is normally expected to be the beneficiary of that account,
and that is totally separate from people named in the will. *You can
even name 40% to one person, 40% to another, and 20% to the estate for
other distributions (just an example). *But money listed for a
beneficiary (other than the estate) is not included in bequests made in
the will. *The same is true for insurance policies--money goes directly
to the beneficiary (and the estate can be one), and it is not calculated
when distributing money per the will. *I am also surprised that only 10%
was held back for taxes. That normally is a minimum of 20%.
I'm sorry you are having to go through this. *On the brighter side, you
did get one very important (and valuable) item that went directly to
you, and that was the house. *It is not a liquid asset and does not help
with the payment of taxes, but it is an asset that does not have to be
shared.
MaryL
Now I really *will* appear to be the bearer of bad tidings, on top of my
previous message. *However, I just re-read the part of your message where
you were named the beneficiary and then you distributed that money among
the three of you. *The reason it was reported under your Social Security
number, of course, is that you were the legal beneficiary. *However, the
part that concerns me is that you may have gone *above* the maximum limit
for tax-free gifts. *Unless it has changed, you could give $12,000 per
year to each person without federal tax consequences. *Anything above
that would be taxable, and the *donor* is usually responsible for that
tax. *I am speaking as someone with no legal training, of course, but I
am concerned that there may be some extra tax consequences as a result of
that. *I think you would be wise to ask a professional about that. *You
might even be able to check with H&R Block without any additional cost
since they prepared the form, but this is something that would probably
come out when you prepare your *own* taxes since it's a consequence of
your gift rather than one legally coming from your mother. *One thing I
had my mother do when she was living with me was that she listed the
three of us equally as beneficiaries with POD (payment on death).
Her bank accounts and other investments were all listed as POD. *It was
just this stupid annuity that wasn't.
*I knew that was how she had us listed in her will, but I also knew that
people listed as beneficieries would receive that money directly instead
of theough the estate.The exception was one account where she named
herself and me as joint owners. *Since it was really her money, I felt
that it should be divided. *So, I divided that among us in way her will
specified for anything that might not have been covered. *However, I did
hold a portion until her final tax papers were filed. *I explained that
to my sister and brother and told them that I was holding it for possible
tax payments. *I was a lot more fortunate than you--*much* less money was
involved for us and did not go above the "giftable" limit, but my brother
and sister were always fully supportive of everything I did. *In fact,
they insisted that I keep some extra for myself for all the work I did.
Incidentally, another advantage of following the advice in your last
paragraph is that money that is paid directly to beneficiaries does not
go through probate, and there is no attorney fee attached to it.
(...again, speaking from experience and *not* as a person with any legal
training--and therefore cannot give legal advice)
MaryL
Per the IRS, the "gift limit" is $1 million dollars. *The IRS made sure I
knew about that when I talked to them. *This came nowhere near hitting a
million dollars, but I'm still responsible for the taxes on that friggin
annuity. *I'm not planning on making any gifts. *But thanks for the info
for other people in the U.S. who may run into this situation.
Jill
Doesn't the $1 million actually apply to money coming directly from an
estate but not to a gift given by an individual? *From your description, it
sounds like yours is a gift from you and not from the estate? *I'm
definitely not an expert in this area, and you have already checked with
IRS. *Here's an article describing part of what I was discussing:http://www.fairmark.com/begin/gifts.htm

MaryL- Hide quoted text -

- Show quoted text -

FYI -- An interesting bit of trivia I read the other day.

If the wealth of the entire world were equally distributed among the
planet's inhabitants -- that is, if every man, woman and child
received
a disbursement that would equal all the money in the world, can you
guess how much it would be?

$9,000. Nine thousand dollars.

Kind of puts things in perspective, doesn't it?

Sherry

Frankly, I a, surprized it is that much. *There are so many who have
absolutely nothing.- Hide quoted text -

Absolutely. It reminds me of the song "Count your blessings,
name them one by one." We really are all privileged, compared
to so many people.

Sherry

(OT) Rant Mom's Estate - a Cautionary Tale
 

"MaryL" -OUT-THE-LITTER wrote in message
. ..

"jmcquown" wrote in message
...
Per the IRS, the "gift limit" is $1 million dollars. The IRS made sure I
knew about that when I talked to them. This came nowhere near hitting a
million dollars, but I'm still responsible for the taxes on that friggin
annuity. I'm not planning on making any gifts. But thanks for the info
for other people in the U.S. who may run into this situation.

Jill
Doesn't the $1 million actually apply to money coming directly from an
estate but not to a gift given by an individual? From your description,
it sounds like yours is a gift from you and not from the estate? I'm
definitely not an expert in this area, and you have already checked with
IRS. Here's an article describing part of what I was discussing:
http://www.fairmark.com/begin/gifts.htm

MaryL


Nope, money from the estate is not a gift nor is it taxable. They told me
the money I "gave" to my brothers was a gift and would go towards the $1
million lifetime gift limit.

Jill