Mom wants to put some of her investments into my name. Anyone else dealt with this?

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Katiekate Asked November 2016

Mom wants to put some of her investments into my name. Anyone else dealt with this?

My Mom has become concerned to make sure the probate court doesn't get involved when she passes. She set everything up so that when my Dad recently passed, probate didn't get a chunk of the estate..because there was no estate. Now she is determined to do this again.

The bank, and investment firm have no problem putting my name on the accounts with hers. As JT WROS. But, the credit union says they cannot do this by law.

But, the credit union has the best rate on CDs. No where else even comes close to those great rates. Mom is determined to figure out how to keep those CDs and keep the investment away from probate. Her answer is to transfer them into my name now.

I completely understand all the issues surrounding the possible future use of Medicaid. Since I would not consider the money mine to use...except if I ever have to use it to pay a NH on her behalf.

My concern is that ... God forbid something happen to me, this could really backfire.

I looked at the creation of a trust. Between the lawyers fees, and the ongoing cost of filing etc for trustee...within a couple years it ends up costing as much as probate court would have anyway.

Colorado court system doesn't make any of this easy.

Has anyone else tried to deal with this situation?

Financial Planning

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score 0 · Answer 1

The estate pay probate. The amount is a percent of the total amount handled by probate over $64,000. That is the chunk I mean.

The credit union only wants a totten trust. This is totally unfriendly.

We are going to look at just moving the money to her other brokerage account, and setting up WROS.

As for the taxes....yeah..the gift tax is invoked above $14,000 per year. Which makes me wonder about the 5.3 million lifetime. HUH? How do you reconcile that. At a limit of $14,000 per year. You would have to live 378 years to give that much away...to one person...or. Give that much per year to 38 people every year for 10 years.....etc.

Anyway. Still looks like it is not doable with an uncooperative credit union.

So...back to brokerage. Looks like the rules are that it is only considered a gift if I ever use any part of it for my own benefit. Which I will not do. It is not the point of doing it.

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score 0 · Answer 2

Katie - don't worry about the gift tax unless your mother has exceeded the allowable lifetime amount from the IRS, which is $5.43 million dollars.

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score 1 · Answer 3

Katie, She simply has to name you as a beneficiary to her investment accounts, outside of probate. Gifting them to you now will result in her having to pay gift taxes and you get hit with income taxes.

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score 0 · Answer 4

Ask the credit union if they can set the CD's up as Transfer on Death (TOD) instead of putting them in your name - gifting them to you requires filing of paperwork to IRS this year (no tax due but form must be filled out) if above the annual limit for your mother and if you're not a tax preparer it can be daunting. See if they recognize a Totten Trust - payable on death bank accounts that don't give you access while she is alive but assets that pass to you upon death.

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score 0 · Answer 5

Just curious- how would probate "get a chunk of the estate"?

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score 0 · Answer 6

Can you put the cds in your name and list your mother as the beneficiary- if something happened to you the cds would then revert back to her ownership.

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Mom wants to put some of her investments into my name. Anyone else dealt with this?

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