Inheritance Q

[Anonymous]

Why are they favoring this one child? Has it always been this way? I’m assuming this isn’t about money, but how you feel less than to your parents. However, you kind of sound like a vulture.

[Anonymous]

Take the market Value of the house at time of death out of sibling’s share. This doesn’t account for sib’s mortgage-free life, but it’s better than cure the day market value.

[Anonymous]

Anonymous wrote:That’s not a smart way to do it, anyway. Giving a million dollar asset to your sibling now has significant tax implications. It will need to be documented with the IRS as a gift and count against your parent’s lifetime estate tax exemption. Your sibling will also get your parent’s basis, as opposed to a stepped up basis if they inherited it. The estate tax exemption might not matter under the current exemption, but the current level sunsets in the next few years and there is no guarantee what the level will be in the future. It could be significantly less.

The best thing you could do here is suggest to your parents that they get some good tax advice STAT. There are probably creative solutions involving trusts that could be structured to let your sibling have use of the house while making it fair for the other heirs, in a way that would also maximize the tax benefits of the inheritance laws.

+1

This arrangement sounds clueless from a tax and estate perspective.

Also noting there have been threads here in the past from people with an estate wondering how to fairly share it. General consensus is to split equally absent special circumstance for one of the children. Will note many even oppose splitting a portion among all the grandchildren on the grounds that less favorable to siblings with no or fewer children. (Not sure I agree with that part.)

Point is, distribution of parental assets that lopsidedly favors one sibling over the others is an almost surefire way to set siblings against each other, again absent special circumstances. Why would any well-meaning parent do this and leave this as their legacy to their children?

[Anonymous]

Anonymous wrote:Is there context missing on why they would gift their house to this sibling specifically? If, as you say, all of you have houses and mortgages of your own right now?

Because this is odd, and I'm trying to understand.

There's got to be more to this.

I am also trying to understand. I think the sibling suggested it and my parents went for it. They also didn't tell us all together. I called one sibling a week after I found out (because my parents asked me not to saying anything to my other siblings when they told me, since they wanted to tell my other siblings) and he still had no idea. I don't think it's intentional, but I think that my parents haven't thought this through and that they're doing this in a way that is really destructive for our relationships.

[Anonymous]

Anonymous wrote:Why are they favoring this one child? Has it always been this way? I’m assuming this isn’t about money, but how you feel less than to your parents. However, you kind of sound like a vulture.

You'd be a horrible therapist. I'd say stick to your day job, but that's probably trolling dcurbanmom. So maybe just get a life?

[Anonymous]

Anonymous wrote:

Anonymous wrote:Is there context missing on why they would gift their house to this sibling specifically? If, as you say, all of you have houses and mortgages of your own right now?

Because this is odd, and I'm trying to understand.

There's got to be more to this.

I am also trying to understand. I think the sibling suggested it and my parents went for it. They also didn't tell us all together. I called one sibling a week after I found out (because my parents asked me not to saying anything to my other siblings when they told me, since they wanted to tell my other siblings) and he still had no idea. I don't think it's intentional, but I think that my parents haven't thought this through and that they're doing this in a way that is really destructive for our relationships.

Any insights into your sibling's motivations? Is she financially literate enough to know the implications for other siblings as well as the tax and estate implications? Does she care if she has good relations with the rest of you?

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Is there context missing on why they would gift their house to this sibling specifically? If, as you say, all of you have houses and mortgages of your own right now?

Because this is odd, and I'm trying to understand.

There's got to be more to this.

I am also trying to understand. I think the sibling suggested it and my parents went for it. They also didn't tell us all together. I called one sibling a week after I found out (because my parents asked me not to saying anything to my other siblings when they told me, since they wanted to tell my other siblings) and he still had no idea. I don't think it's intentional, but I think that my parents haven't thought this through and that they're doing this in a way that is really destructive for our relationships.

Any insights into your sibling's motivations? Is she financially literate enough to know the implications for other siblings as well as the tax and estate implications? Does she care if she has good relations with the rest of you?

Sibling is jealous and insecure and likes having nice things. Sibling would not be able to afford a very nice house in a very nice area (mkt value is close to $3M), so this is the best way to do it. Sibling definitely does not understand tax implications, but parents will probably take care of that for sibling...and not a concern. Sibling understands that getting house now is better for them than getting house in 30 years from an estate standpoint, since it's worth so much less now than it will be in 30 years and thus, represents a smaller part of the estate. Sibling also understands no mortgage and implications of being able to sell current home and keep equity to invest in market, buy nice things, go on expensive vacations, etc.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Is there context missing on why they would gift their house to this sibling specifically? If, as you say, all of you have houses and mortgages of your own right now?

Because this is odd, and I'm trying to understand.

There's got to be more to this.

I am also trying to understand. I think the sibling suggested it and my parents went for it. They also didn't tell us all together. I called one sibling a week after I found out (because my parents asked me not to saying anything to my other siblings when they told me, since they wanted to tell my other siblings) and he still had no idea. I don't think it's intentional, but I think that my parents haven't thought this through and that they're doing this in a way that is really destructive for our relationships.

Any insights into your sibling's motivations? Is she financially literate enough to know the implications for other siblings as well as the tax and estate implications? Does she care if she has good relations with the rest of you?

Sibling is jealous and insecure and likes having nice things. Sibling would not be able to afford a very nice house in a very nice area (mkt value is close to $3M), so this is the best way to do it. Sibling definitely does not understand tax implications, but parents will probably take care of that for sibling...and not a concern. Sibling understands that getting house now is better for them than getting house in 30 years from an estate standpoint, since it's worth so much less now than it will be in 30 years and thus, represents a smaller part of the estate. Sibling also understands no mortgage and implications of being able to sell current home and keep equity to invest in market, buy nice things, go on expensive vacations, etc.

And yes, sibling understands that this will put a wedge between all of us. Apparently that's a concern.

[Anonymous]

Anonymous wrote:My parents are moving and want to give one of my siblings their current house (worth a few million) which this sibling would use as their new primary residence. We all have families and all own our homes, but have mortgages. We also all work, as do our spouses. My parents have floated that if this property transfer occurred they would take the market value of the house when they deed it over to sibling out of that sibling's portion of their estate. However, I don't think that this is fair. This sibling will not only have a huge asset and no mortgage in their 30s, they will be able to take the equity from the sale of their other house and put it into the market where it will grow exponentially. When the rest of us inherit our portions of the estate, the house will be worth considerably more than it is now and the sibling's equity (if put into the market) will have also grown considerably. I have not said anything yet, but I think that if this sibling is given a home worth a few million that the other siblings should be given the same amount in stock/cash. Does this sound fair? Is there anything I'm not thinking of here?

Two things you are not thinking about:

1. How greedy you are.
2. How it is none of your business what your parents do with their money.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Is there context missing on why they would gift their house to this sibling specifically? If, as you say, all of you have houses and mortgages of your own right now?

Because this is odd, and I'm trying to understand.

There's got to be more to this.

I am also trying to understand. I think the sibling suggested it and my parents went for it. They also didn't tell us all together. I called one sibling a week after I found out (because my parents asked me not to saying anything to my other siblings when they told me, since they wanted to tell my other siblings) and he still had no idea. I don't think it's intentional, but I think that my parents haven't thought this through and that they're doing this in a way that is really destructive for our relationships.

Any insights into your sibling's motivations? Is she financially literate enough to know the implications for other siblings as well as the tax and estate implications? Does she care if she has good relations with the rest of you?

Sibling is jealous and insecure and likes having nice things. Sibling would not be able to afford a very nice house in a very nice area (mkt value is close to $3M), so this is the best way to do it. Sibling definitely does not understand tax implications, but parents will probably take care of that for sibling...and not a concern. Sibling understands that getting house now is better for them than getting house in 30 years from an estate standpoint, since it's worth so much less now than it will be in 30 years and thus, represents a smaller part of the estate. Sibling also understands no mortgage and implications of being able to sell current home and keep equity to invest in market, buy nice things, go on expensive vacations, etc.

And yes, sibling understands that this will put a wedge between all of us. Apparently that's a concern.

*that's not a concern

[Anonymous]

Anonymous wrote:

Anonymous wrote:My parents are moving and want to give one of my siblings their current house (worth a few million) which this sibling would use as their new primary residence. We all have families and all own our homes, but have mortgages. We also all work, as do our spouses. My parents have floated that if this property transfer occurred they would take the market value of the house when they deed it over to sibling out of that sibling's portion of their estate. However, I don't think that this is fair. This sibling will not only have a huge asset and no mortgage in their 30s, they will be able to take the equity from the sale of their other house and put it into the market where it will grow exponentially. When the rest of us inherit our portions of the estate, the house will be worth considerably more than it is now and the sibling's equity (if put into the market) will have also grown considerably. I have not said anything yet, but I think that if this sibling is given a home worth a few million that the other siblings should be given the same amount in stock/cash. Does this sound fair? Is there anything I'm not thinking of here?

Two things you are not thinking about:

1. How greedy you are.
2. How it is none of your business what your parents do with their money.

Sorry your life sucks

[Anonymous]

My parents are kind of considering something similar but not exactly the same with my brother. My parents, brother, and 90-year-old grandmother all live in the same town. My brother is in his mid 30s and rents an apartment with a roommate, and I own a condo with my husband in DC. My parents have said that they would let my brother live in my grandmother's house when she passes away as long as he pays all the expenses/property taxes/etc. There hasn't been talk of giving him the house though, just of letting him live there at a discount.

This does not bother me even though I am paying a mortgage and feel unable to afford a house in a neighborhood where I would want to live. I have more means than my brother and so am ok with them helping him out in this way. I also feel fortunate that my parents are well off, we will not need to pay for their care as they age, and that we are likely to get a comfortable inheritance down the line. My husband's family has been in the opposite situation, where my MIL went through bankrputcy and was living off of SS alone, and that has been very stressful for my husband and his siblings. The possibility of an inheritance seems like a big bonus over and above knowing that my parents have enough to provide for themselves.

I think I don't feel badly because I feel fortunate for what I might end up getting and for what my parents have already given me. My brother lived with my parents for awhile and they have also bought him cars, but they paid for college for me and it was a lot more than my brother's education. My brother also is more of a caretaker personality than I am, and he already helps my parents/grandparents out more than I do from afar. So I think it all evens out in my mind.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Is there context missing on why they would gift their house to this sibling specifically? If, as you say, all of you have houses and mortgages of your own right now?

Because this is odd, and I'm trying to understand.

There's got to be more to this.

I am also trying to understand. I think the sibling suggested it and my parents went for it. They also didn't tell us all together. I called one sibling a week after I found out (because my parents asked me not to saying anything to my other siblings when they told me, since they wanted to tell my other siblings) and he still had no idea. I don't think it's intentional, but I think that my parents haven't thought this through and that they're doing this in a way that is really destructive for our relationships.

Any insights into your sibling's motivations? Is she financially literate enough to know the implications for other siblings as well as the tax and estate implications? Does she care if she has good relations with the rest of you?

Sibling is jealous and insecure and likes having nice things. Sibling would not be able to afford a very nice house in a very nice area (mkt value is close to $3M), so this is the best way to do it. Sibling definitely does not understand tax implications, but parents will probably take care of that for sibling...and not a concern. Sibling understands that getting house now is better for them than getting house in 30 years from an estate standpoint, since it's worth so much less now than it will be in 30 years and thus, represents a smaller part of the estate. Sibling also understands no mortgage and implications of being able to sell current home [b]and keep equity to invest in market, buy nice things, go on expensive vacations, etc.

I thought from OP that sibling does not currently have a house. So her plan is to get your parent's house for free then sell it? Somehow, this makes the plan sound even odder..

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Is there context missing on why they would gift their house to this sibling specifically? If, as you say, all of you have houses and mortgages of your own right now?

Because this is odd, and I'm trying to understand.

There's got to be more to this.

I am also trying to understand. I think the sibling suggested it and my parents went for it. They also didn't tell us all together. I called one sibling a week after I found out (because my parents asked me not to saying anything to my other siblings when they told me, since they wanted to tell my other siblings) and he still had no idea. I don't think it's intentional, but I think that my parents haven't thought this through and that they're doing this in a way that is really destructive for our relationships.

Any insights into your sibling's motivations? Is she financially literate enough to know the implications for other siblings as well as the tax and estate implications? Does she care if she has good relations with the rest of you?

Sibling is jealous and insecure and likes having nice things. Sibling would not be able to afford a very nice house in a very nice area (mkt value is close to $3M), so this is the best way to do it. Sibling definitely does not understand tax implications, but parents will probably take care of that for sibling...and not a concern. Sibling understands that getting house now is better for them than getting house in 30 years from an estate standpoint, since it's worth so much less now than it will be in 30 years and thus, represents a smaller part of the estate. Sibling also understands no mortgage and implications of being able to sell current home and keep equity to invest in market, buy nice things, go on expensive vacations, etc.

And yes, sibling understands that this will put a wedge between all of us. Apparently that's a concern.

Concern of sibling or your parents?

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:My parents are moving and want to give one of my siblings their current house (worth a few million) which this sibling would use as their new primary residence. We all have families and all own our homes, but have mortgages. We also all work, as do our spouses. My parents have floated that if this property transfer occurred they would take the market value of the house when they deed it over to sibling out of that sibling's portion of their estate. However, I don't think that this is fair. This sibling will not only have a huge asset and no mortgage in their 30s, they will be able to take the equity from the sale of their other house and put it into the market where it will grow exponentially. When the rest of us inherit our portions of the estate, the house will be worth considerably more than it is now and the sibling's equity (if put into the market) will have also grown considerably. I have not said anything yet, but I think that if this sibling is given a home worth a few million that the other siblings should be given the same amount in stock/cash. Does this sound fair? Is there anything I'm not thinking of here?

Two things you are not thinking about:

1. How greedy you are.
2. How it is none of your business what your parents do with their money.

Sorry your life sucks

Disagree somewhat. Yes her parents can do whatever they wish with their money. That they would do something that would so inevitably tear the siblings apart would concern me.