Inheritance Q

[Anonymous]

Anonymous wrote:Not fair huh OP?

You know what isn’t fair. Growing very poor in rural America and remembering being so hungry that you stole food out of a neighbor’s dog bowl and then feeling guilty doing it. You stand to inherit millions and I’m sure grew up with every privilege and then more than what I could ever have imagined as a child.

You got it so very good.

Doesn't matter whether you are rich or poor. Having one sibling heavily favored over the others always has a huge potential to be hurtful.

[Anonymous]

Anonymous wrote:Not fair huh OP?

You know what isn’t fair. Growing very poor in rural America and remembering being so hungry that you stole food out of a neighbor’s dog bowl and then feeling guilty doing it. You stand to inherit millions and I’m sure grew up with every privilege and then more than what I could ever have imagined as a child.

You got it so very good.

I’m not OP, but one can recognize their own privilege and overwhelming advantages as compared to others, and still want fair treatment from their parents. The way you grew up or the way anyone else grew up has nothing to do with her specific family. What is universal, however, is that favoritism destroys sibling relationships.

[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.

Why are you going to such lengths to avoid pronouns? We all you are a woman and the sibling in question is your sister. Whatever your sister's flaws, you have always been competitive with her and don't want good things to happen to her.

+1

I don't see brothers getting into this level of pettiness.

[Anonymous]

Anonymous wrote:

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.

Why are you going to such lengths to avoid pronouns? We all you are a woman and the sibling in question is your sister. Whatever your sister's flaws, you have always been competitive with her and don't want good things to happen to her.

+1

I don't see brothers getting into this level of pettiness.

I think OP dropped something somewhere along the line indicating it was a sister.

Sometimes these kinds of jerk moves are pushed by a sibling's spouse, who could be either a husband or a wife. i remember when my brother's wife died with three young children. Her brother, egged on by his wife, told my brother he wasn't capable of raising the kids and he and his wife should take them.

[Anonymous]

Anonymous wrote:

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.

Why are you going to such lengths to avoid pronouns? We all you are a woman and the sibling in question is your sister. Whatever your sister's flaws, you have always been competitive with her and don't want good things to happen to her.

+1

I don't see brothers getting into this level of pettiness.

Well this is a breathtakingly ignorant comment. If you are not familiar with men with large egos and petty, acquisitive natures, you are very lucky as they occur in American society in percentages at least equal to women with the same qualities.

[Anonymous]

Anonymous wrote:

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.

Why are you going to such lengths to avoid pronouns? We all you are a woman and the sibling in question is your sister. Whatever your sister's flaws, you have always been competitive with her and don't want good things to happen to her.

+1

I don't see brothers getting into this level of pettiness.

Is wanting an equal cut of $3 million petty? I don’t think so even at OP’s family’s level of wealth.

[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.

This is why you need to appeal to your sister’s greed. Doing it this way is actually quite stupid from her perspective. Assuming your parent’s basis is quite low, the basis change alone (vs. inheritance) could mean paying capital gains on millions when she sells. Any good estate lawyer will try to talk your parents out of doing it this way. IME, a good lawyer will also try to suggest doing it in a way that is fair to all the siblings.

Sounds like a better solution is for your parents to let your sibling live in their house rent free, aside from upkeep and taxes. Then at death the value of the house is divided among the three of you, with stepped up basis. Your sibling still gets to sell their current home, but at least they don't get all of the appreciation of your parents home.

[Anonymous]

Anonymous wrote:

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.

This is why you need to appeal to your sister’s greed. Doing it this way is actually quite stupid from her perspective. Assuming your parent’s basis is quite low, the basis change alone (vs. inheritance) could mean paying capital gains on millions when she sells. Any good estate lawyer will try to talk your parents out of doing it this way. IME, a good lawyer will also try to suggest doing it in a way that is fair to all the siblings.

Thank you for pointing this out! I have no idea what basis is. Can you explain further?

It’s complicated, which is why your parents need good legal advice, but the simplified version is that your “cost basis” for tax purposes is what you paid for the house (other things, like improvements, can add to the basis, which is where it gets more complicated) but it establishes the baseline for calculating any profit when you sell the house for purposes of capitol gains tax. Say your parents paid $300,000 a long time ago. If they did, and the house is worth $3 million at the time of their death, the heirs get a “stepped up basis” of $3 million. If your parents give your sister the house, your sister only gets the $300,000 basis. When she goes to sell, she’d owe capital gains tax on the sales price minus $300,000. If she inherited the house, she’d owe tax on the sales price minus $3 million. Huge difference.

Also, if your parents give the house to your sister, they will have to disclose the gift to the IRS, and it will count against their lifetime estate tax exemption. Unless the have over $24 million in assets, it wouldn’t cause an issue now, but the estate exemption will have to be reset by Congress in the next few years, and it has been as low as a million in the past. If the exemption drops and your parent’s estate is worth more than the exemption amount — including the three million gift — the estate will owe estate tax. There are different ways to deal with this situation with various types of trusts.

This is a complex area and I can’t emphasize that enough that they need good legal advice tailored to their situation.

[Anonymous]

Anonymous wrote:

Anonymous wrote:Not fair huh OP?

You know what isn’t fair. Growing very poor in rural America and remembering being so hungry that you stole food out of a neighbor’s dog bowl and then feeling guilty doing it. You stand to inherit millions and I’m sure grew up with every privilege and then more than what I could ever have imagined as a child.

You got it so very good.

I’m not OP, but one can recognize their own privilege and overwhelming advantages as compared to others, and still want fair treatment from their parents. The way you grew up or the way anyone else grew up has nothing to do with her specific family. What is universal, however, is that favoritism destroys sibling relationships.

+1. Just say something, OP. If your parents have been equitable in the past, why would they act differently now and blow up all of your relationships in the process?

[Anonymous]

Is this being done to avoid a property tax reassessment in a part of the country where that is an issue? that is the only reason it makes sense to me. Essentially the OP's sibling is being given an interest free loan on the future inheritance. That said, if I were OP I would probably just let it go since it would not be worth upsetting family dynamics.

[Anonymous]

Anonymous wrote:Is this being done to avoid a property tax reassessment in a part of the country where that is an issue? that is the only reason it makes sense to me. Essentially the OP's sibling is being given an interest free loan on the future inheritance. That said, if I were OP I would probably just let it go since it would not be worth upsetting family dynamics.

Not sure what this means. Doing this in itself will destroy the sibling dynamic. Perhaps you are saying best not to say anything lest she disrupt her dynamic with her parents.

From OP's responses, there seems to be a chance that the parents haven't grasped this would upset sibling relations and that, in any case, it is not a smart move from an estate planning perspective. It's worth OP diplomatically pointing out that this plan is inequitable to check their awareness.

[Anonymous]

The parents are somehow gifting their $3m house to OPs sibling? That is a huge upset to family dynamics.

[Anonymous]

Anonymous wrote:Is this being done to avoid a property tax reassessment in a part of the country where that is an issue? that is the only reason it makes sense to me. Essentially the OP's sibling is being given an interest free loan on the future inheritance. That said, if I were OP I would probably just let it go since it would not be worth upsetting family dynamics.

For areas I’m aware of where property tax reassessment is an issue (e.g., California), the tax isn’t reassessed if the property is inherited by a child of the deceased.

[Anonymous]

Anonymous wrote:

Anonymous wrote:Is this being done to avoid a property tax reassessment in a part of the country where that is an issue? that is the only reason it makes sense to me. Essentially the OP's sibling is being given an interest free loan on the future inheritance. That said, if I were OP I would probably just let it go since it would not be worth upsetting family dynamics.

For areas I’m aware of where property tax reassessment is an issue (e.g., California), the tax isn’t reassessed if the property is inherited by a child of the deceased.

Interesting question. The parents' original plan was to see the property, at which point it would be reassessed. Don't know if gifting the property to a child while the parents are alive would trigger reassessment.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

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.

Why are you going to such lengths to avoid pronouns? We all you are a woman and the sibling in question is your sister. Whatever your sister's flaws, you have always been competitive with her and don't want good things to happen to her.

+1

I don't see brothers getting into this level of pettiness.

Is wanting an equal cut of $3 million petty? I don’t think so even at OP’s family’s level of wealth.

NP
It is parents money.
Maybe the other sibling visit more often, live near by or love the child hood home.
OP can ask her parents and probably did and didn’t like the answer.