Beginning-of-Year Financial Tasks

There are some tasks that, if left undone, can have an enormous impact on those you love. The beginning of the year is a good time to set some deadlines for yourself, while you still have New Years resolution momentum. Give yourself a February 15 deadline, and you’ll stay focused says The Daily Journal’s article “5 financial tasks you should tackle by year-end.”

Here’s the list to get you started:

Check Your Beneficiaries on All Accounts. A sad story comes from Washington state, where a man died two months after his divorce was finalized. He had not changed his beneficiaries, so all of his life insurance proceeds and his pension plan went to his ex-wife, and not to his children from a prior marriage. The case went through the court system all the way up to the U.S. Supreme Court, which ruled in 2001 that the beneficiary designations had to be honored.

Start by making a list of your accounts, then check to see who your beneficiaries are. You may need to contact the financial custodian of the accounts, or you might be able to do it online. Ask for confirmation in all cases, so you and your heirs will have it in writing. Keep this in an organized binder so it will be easy to find if something were to happen to you.

Look at Any Pay-On-Death Designations. In some accounts, there is a pay-on-death designation, in place of a beneficiary designation. This also may have been an option that you chose when you first opened the account. Without a designation or Pay-On-Death name, the account must go through probate, the legal procedure to distribute property in your estate.

Depending on the state, you might have had this option on the property or even vehicles. A local estate planning attorney will know if this is an option in your state. To add or change a beneficiary on a vehicle, you’ll need to apply for a certificate of car ownership with the beneficiary form. If you want to change your deed to a Transfer-on-Death deed, you will need to submit a new deed to the appropriate county recorder. Again, an estate planning attorney will be able to help. The lawyer will also help evaluate whether this is a good way to transfer property in your situation.

Update Insurance Policies. The insurance company is not going to send a beneficiary a check without someone filing a claim. The family often does not know what insurance policies exist. A 2013 investigation from Consumer Reports found nearly $1 billion in unclaimed life insurance proceeds. You want to update your contact information with the insurer every now and then, making sure that your beneficiaries are correct and that bills are being sent to the right address. In some cases, the insurance company allows people to notify another person if payment is overdue and they are not able to reach you. You should also keep that contact information updated, in case your back-up person moves. Keep a list of your insurance policies in a place easy to find.

What’s In Your Safe Deposit Box? If it’s been a while since you’ve visited your safe deposit box, schedule a time to go and have a look. If you neglect to pay your annual fee, after a number of years the bank is legally permitted to open the box and turn its contents over to the state. Visit once a year to make sure payments and contact details are current. Leave clear instructions with your executor and heirs about where to find the box and its keys. Consider giving another family member official access to the box.

Revise Powers of Attorney. Now is a good time to review your powers of attorney to see if it’s time for an update. If you can’t locate your original POA documents, or if the people you chose many years ago have died or moved away, it’s time for a new set. And if you don’t have power of attorney documents in place, make an appointment with your estate planning lawyer to have them created. Spare your family the stress, lost time, and unnecessary expenses that trying to get access to your accounts might cause by having these updated and name a backup agent (or two).

Yes, technically this article was for the end of the year, but we are a long way from the end of 2020 and I have a feeling that these tasks weren’t on any of your holiday ‘to-dos’ or end of year lists.  Heck, even if you did set yourself a deadline to complete these tasks before the end of the year that would be fantastic.

Reference: The Daily Journal (Nov. 18, 2019) “5 financial tasks you should tackle by year-end”

You Can Protect Pets after You’re Gone

Many of us consider our pets members of the family, but the law does not. In most states, if not all, pets are considered property, reports the East Valley Tribune in the article “Trusts can help provide for a pet’s future.” That means you can’t leave them your house or open a bank account in their name. However, you can take measures to protect your pets from what could happen to them after you pass away.

The simple thing to do is to make arrangements with a trusted family member or friend to take care of your pet and leave some money for their care. The problem is, there’s no way to enforce this, and it’s all based on trust. What happens if something unexpected happens to your trusted family member or friend, and they can’t care for your pet? You’ve also given them funds that they are not legally required to spend on your pet.

Another choice is to leave your pet to a no-kill animal shelter. However, shelters, even no-kill shelters, can be stressful for animals who are used to a family home. There’s also no way to know when your pet will be adopted since most people come to shelters to adopt puppies and kittens. There is also the issue of the shelter itself. Will it continue to operate after you are gone and protect your pet?

The best way that many people care for their pets, is by having a pet trust created. An estate planning attorney in your state will know if your state is among the many that allow a pet trust to be created to benefit and protect your pet.

Start by naming a guardian or caretaker for your pets, including instructions on whether your pets should be kept together. If you are not sure about a guardian, name additional guardians, in case one does not wish to serve. Then, determine how much money you need to leave for the pet’s care for its life. This will depend upon the animal’s age, health, and life expectancy. There will need to be adequate funding for any medical issues. The trust can specify whether you want your pet to undergo expensive surgeries or whether they should be kept comfortable at any cost.

You’ll want to make sure to name a guardian who you are confident will care for your pet or pets in the same manner as you would.

A pet trust will also require you to name a trustee, who will be in charge of disbursing the funds as they are needed. The trustee can also check on the pet to be sure your pet is being well-cared for and your instructions are being followed. The money in the trust must only be used by the person for the care of the pets.

A pet trust will give you the peace of mind of knowing that your beloved companion animals are being cared for, even when you are not here to care for them. Speak with an estate planning attorney to learn how to make a pet trust part of your overall estate plan.

Reference: East Valley Tribune (Oct. 14, 2019) “Trusts can help provide for a pet’s future”

Managing an Aging Parent’s Financial and Legal Life

Managing an Aging Parent’s Financial and Legal Life
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As parents age, it becomes more important for their children or another trusted adult to start helping them with their finances and their legal documents, especially an estate plan. In “Six tips for managing an elderly parent’s finances,” ABC7 On Your Side presents the important tasks that need to be done.

Make sure the family knows where important personal and financial documents are in an emergency. Start with a list that includes:

  • Bank, brokerage and credit card statements
  • Original wills, powers of attorney, healthcare directives, and estate planning documents
  • Insurance policies
  • Social Security information
  • Pension records
  • Medicare information

They’ll need a list of all accounts, safe deposit boxes, financial institutions and contact information for their estate planning attorney, CPA and financial advisors. Even if they don’t want to share this information until an emergency occurs, make sure it is organized and compiled somewhere a family member can find it easily.

Set up direct deposit for any incoming funds. Automating the deposit of pension and benefit checks is far more secure and convenient for everyone. This prevents a delay in funds being deposited and checks can’t be stolen in the mail or lost at home.

Set up automatic bill payment or at least online bill payment. Making these payments automatic will save a lot of time and energy for all concerned. If your parents are not comfortable with an automatic payment, and many are not, try setting up the accounts so they can be paid online. Work with your parents, so they are comfortable with doing this. They will appreciate how much easier it is and saving themselves a trip to the post office.

Have a “Durable Power of Attorney” prepared. This is a legal document prepared by an estate planning attorney that gives one or more people the legal authority to handle finances or other legal matters if they become mentally or physically incapacitated.

Have a “Living Will” and a “Healthcare Power of Attorney” prepared. The Healthcare Power of Attorney allows a person to make health care decisions for another person if they are mentally or physically incapacitated. The Living Will allows a person to express their wishes about end-of-life care if they are terminally ill and unable to express their wishes.

Take precautions to guard against fraud. Seniors are the chief targets of many scams for two reasons: First, if they have any kind of cognitive decline, no matter how slight, they are more likely to comply with a person posing as an authority figure. Second, they have a lifetime of assets and are a “rich” target.

An estate planning attorney can work with your parents to assist in preparing an estate plan and advising the family on how to help their parents as they age. Most estate planning attorneys have access to a large network of related service providers.

Reference: ABC7 On Your Side (Sep. 5, 2019) “Six tips for managing an elderly parent’s finances,”

How Joint Tenancy Creates Problem for Seniors

How Joint Tenancy Creates Problem for Seniors
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Parents putting children or other family members as joint owners of their assets is another example of what seems like a simple solution for a complex problem. It doesn’t work, even though it seems like it should.

As explained in the article “Beware the joint tenancy trap” from Monterey Herald, putting another person on an account, even a trusted child or life-long friend, can create serious problems for the individual, their estate, and their heirs. Before going down that path, there are several issues to consider.

When another individual is placed as an owner on an account or on the title to real property, they have legal ownership in that property equal to that of the original owner. This is called joint tenancy. If a child is made a joint tenant on a parent’s accounts, they would be entirely within their rights to withdraw every single asset from those accounts and do whatever they wanted with them. They would not need the original owner’s consent, counsel, or knowledge.

Giving anyone that power is a serious decision.

Making a child a joint owner of assets also exposes those assets to claims by the child’s creditors. If they file for bankruptcy, the original asset owner may have to buy back one-half of the asset at its current market value. Another example: if the child is in an accident and a judgment is recorded against the child, you may have to buy back one-half of your joint tenant property at its current market value to settle the claims.

There are other complications that come with the title. If one joint owner of the asset dies, joint tenancy provides for the right of survivorship. The property transfers to the surviving joint tenant without going through probate and with no reference to a will. Even though it can bypass the probate process, it means that the distribution won’t necessarily follow what the parent intended in his estate plan. If the parent dies and the asset transfers directly to the joint tenant—let’s say a daughter—but the will says the assets are to be split between all of the children, her claim on the asset is “senior” to the rest of the children. That means she has the right to keep all of the assets that were held in joint tenancy and all four siblings split the remaining assets.

If there is any friction between siblings, not having equal inheritances could create a fracture in the family that can’t easily be resolved.

Tax exposure is another risk of joint tenancy. When someone is named a joint owner, they have the original owner’s cost basis. When one owner dies, the remaining owner gets a step up in basis only on the proportion of the assets the deceased person owned at death.

Let’s say a son and father are joint owners on an account. When the father dies, the son gets a step-up in basis on one-half of the assets—the assets that the father owned. However, the son’s half retains the original basis. In contrast, if that account was owned solely by the father, all the heirs will inherit the property with a full step-up in basis on the father’s death.

Given the complexities that joint tenancy creates, parents need to think very carefully before putting children’s names on their assets and real property. A better plan is to make an appointment to speak with an estate planning attorney and find out how to protect the parent’s assets through other means, which may include trusts and other estate planning tools.

Reference: Monterey Herald (Sep. 11, 2019) “Beware the joint tenancy trap”

Protecting Your Family’s Inheritance

Protecting Your Family’s Inheritance
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The label of “irrevocable trust” sounds like you might be trying to keep children and grandchildren from being irresponsible with the assets you’ve amassed through a lifetime’s work, but irrevocable trusts can also offer a flexible solution. They are especially helpful in cases of divorce, substance abuse and other situations, reports The Chattanoogan in an article titled “Keeping Your Family from Losing Its Inheritance.”

If we are lucky, we are able to leave a generous inheritance for our children. However, that doesn’t necessarily mean we should give them easy access to all or some of the assets. Some people, particularly younger adults who haven’t yet developed money management skills, or others with problems like a troubled marriage or a special needs family member, aren’t ready or able to handle an inheritance.

In some cases, like when there is a substance abuse problem, handing over a large sum of money at once could have disastrous results.

Many people are not educated or experienced enough to handle a large sum of money. Consider the stories about lottery winners who end up filing for bankruptcy. Without experience, knowledge, or good advisors, a large inheritance can disappear quickly.

An irrevocable trust provides protection. A trustee is given the authority to control how funds are used, when they are given to beneficiaries, and when they are retained for continued investment. Depending on how the trust is created, the trustee can have as much control over distributions as is necessary.

An irrevocable trust also protects assets from creditors. This is because the assets are owned by the trust and not by the beneficiary. An irrevocable trust can also protect the funds for a beneficiary from divorces, lawsuits and bankruptcies, and manipulative family members and friends.

Once the money leaves the trust and is disbursed to the beneficiary, that money becomes available to creditors, just as any other asset owned by the person. However, there is a remedy for that, if things go bad.  Instead of distributing funds directly to the beneficiary, the trustee can pay bills directly. That can include payments to a school, a mortgage company, medical bills, or any other costs.

The trustee, not the beneficiary, is in control of the assets and their distributions.

The person establishing the trust (the “grantor”) determines how much power to give to the trustee. The grantor determines whether the trustee is to distribute funds on a regular basis, or whether the trustee is to use their discretion, as to when and how much to give to the beneficiary.

Here’s an example. If you’ve given full control of the trust to the trustee, and the trustee decides that some of the money should go to pay a child’s college tuition, the trustee can send a check every semester directly to the college. Some trusts are written so that the trustee can also put conditions on the college tuition payments, mandating that a certain grade level be maintained or that the student must graduate by a certain date.

Appointing the trustee is a critical piece of the success of any trust. If no family members are suitable, then a corporate trustee can be hired to manage the trust. Speak with a qualified estate planning attorney to learn if an irrevocable trust is a good idea for your situation. A professional can also determine whether or not a family member should be named the trustee.

Reference: The Chattanoogan (July 5, 23019) “Keeping Your Family from Losing Its Inheritance.”

The Conversation with Your Doctor, Estate Planning Lawyer and Family Members

Everyone needs to have an annual checkup, taking stock of their health with their primary doctor. The annual check is also a good time to make sure that everyone is on the same page when it comes to instructions for health care and an advanced healthcare directive, also known as a living will. When people sign their last will and testament, everyone breathes a big sigh, says The Huntsville Item’s article “Make sure you talk to your doctor and family.” But that’s not the end of estate planning.

Your primary care doctor needs to know what your wishes are, as well as your spouse and children. The best way to make sure they have this information, in addition to having a conversation, is to bring a copy of an advanced healthcare directive or living will with you to your next check up and talk with your doctor about it. Ask them to keep a copy on file.

It’s a good idea to give a copy of documents such as the Medical Power of Attorney and Medical Directive to Physicians and Family to each primary care doctor, and a copy to the healthcare agents you have selected.  Don’t forget to keep a copy or two in your records to take with you if you ever have to go to the hospital.

The signed original should be kept with all of your estate planning documents—in a safe place in your home, possibly in a fireproof safe. Make sure to tell a few family members where these original documents are, in case of an emergency.

The hardest part of estate planning is not usually picking the right fiduciaries or deciding how to distribute assets among loved ones. The hardest part is almost always having these conversations with family and loved ones.

It can be so daunting that families often don’t have these important discussions. Here’s the problem: avoiding the conversation doesn’t mean the issues go away. More family infighting takes place after a death than any other time. Emotions are running high, old wounds are opened, and unresolved issues, especially between siblings, come pouring out. If the parent who has died has always been the one who made peace between everyone, that buffer is now gone.

Having this discussion in a low-pressure, non-emergency time is something that every parent should do for their children. Consider a family gathering where the underlying agenda is to get everyone comfortable with the concept of talking about what the future holds. It doesn’t have to be a formal meeting; a casual family get-together is likely more comfortable for everyone.

If the conversations are taking place in a casual manner over an extended period of time, a lot of ground can be covered with less tension and stress. Once you get people used to the idea that you know that you are not going to live forever, it’s easier for everyone because you have now told them you want to be sure they are taken care of.

In some families, these conversations begin when all are invited to attend a family meeting with the estate planning attorney to discuss wills, financial powers of attorney, and medical powers of attorney. Sometimes having this conversation with an experienced professional can take some of the sting out of planning for the future.

Reference: The Huntsville Item (June 30, 2019) “Make sure you talk to your doctor and family”

Protecting Kids from Too Much, Too Fast, Too Soon

When parents think about their kids inheriting a large sum, they often have some concerns. Protecting your kids from frittering away an inheritance is often done through a spendthrift trust but that trust can also be used to protect them from divorce and other problems that can come their way, according to Kiplinger in “How to Keep Your Heirs from Blowing Their Inheritance.”

We all want the best for our kids, and if we’ve been fortunate, we are happy to leave them with a nice inheritance that makes for a better life. However, regardless of how old they are, we know our children best and what they are capable of. Some children, even once they are adults, are simply not prepared to handle a significant inheritance. They may have never learned how to manage money or may be involved with a significant other who you fear may not have their best interests in mind. If there’s a problem with drug or alcohol use, or if they are not ready for the responsibility that comes with a big inheritance, there are steps you can take to help them.

Don’t feel bad if your kids aren’t ready for an inheritance. How many stories do we read about lottery winners who go through all their winnings and end up filing for bankruptcy? An inheritance of any size needs to be managed with care.

A spendthrift trust protects heirs by providing a trustee with the authority to control how the beneficiary can use the funds. A spendthrift trust works like a regular trust but includes special language indicating that the trust qualifies as a spendthrift trust and including limitations to the beneficiary’s control of the funds.

Even if you do not need to protect your child from themselves, a spendthrift trust also protects assets from others. For instance, it shields it from your child’s creditors because the assets are not considered legally your child’s. The trust owns the assets. This also protects the assets from divorces, lawsuits, and bankruptcies. It’s a good way to keep the money out of the hands of manipulative partners, family members, and friends.

Keep in mind, however, that once the money is paid from the trust, the protections are gone. However, while the money is in the trust, it enjoys protection.

The trustee in a spendthrift trust has a level of control that is granted by you, the grantor of the trust. You can stipulate that the trustee is to make a set payment to the beneficiary every month, or that the trustee decides how much money the beneficiary receives.

You can also direct that the trustee pay for things directly. For instance, if the money is to be used to pay college tuition, the trustee can write a check for tuition payments every semester, or they can put conditions on the heir’s academic performance and only pay the tuition if those conditions are met.

For a spendthrift trust, carefully consider who might be able to take on this task. Be realistic about family dynamics. A professional firm, bank, or investment company may be a better, less emotionally involved trustee than an aunt or uncle.

An estate planning attorney can advise you on creating an estate plan that fits your unique circumstances.

Reference: Kiplinger (June 5, 2019) “How to Keep Your Heirs from Blowing Their Inheritance.”

Estate Planning Is for Everyone, at Every Age

As we go through the many milestones of life, it’s important to plan for what we know is coming. Equally important is planning for the unexpected. An estate planning attorney works with individuals, families, and businesses to plan for what lies ahead, says the Cincinnati Business Courier in the article “Estate planning considerations for every stage of life.” For younger families, having an estate plan is like having life insurance: it is hoped that the insurance is never needed, but having it in place is comforting.

For others, in different stages of life, an estate plan is needed to ensure a smooth transition for a business owner heading to retirement, protecting a spouse or children from creditors or minimizing tax liability for a family.

Here are some milestones in life when an estate plan is needed:

Becoming an adult. It is true that for most 18-year-olds, estate planning is the last thing on their minds. However, most states consider these people to be legal adults, and their parents no longer automatically control many things in their lives. If parents want or need to be involved with medical or financial matters, certain estate planning documents are needed. All new adults need a general power of attorney and health care directives to allow someone else to step in if something occurs.

That can be as minimal as a parent talking with a doctor during an office appointment or making medical decisions during a crisis. A HIPAA release should also be prepared. A simple will should be considered, especially if assets are to pass directly to siblings or a significant person in their life, to whom they are not married.

Getting married. Marriage unites individuals and their assets. For newly married couples, estate planning documents should be updated for each spouse. Marriage often means two individuals will merge their estate plans, so documents need to reflect this. A review of their accounts and assets is also good to make sure the new spouse becomes a joint owner, primary beneficiary, and initial fiduciary. In addition to the legal documents of wills, powers of attorney, healthcare directives, something else that needs to be updated to the name of the new spouse or trust are beneficiary designations. This is also a time to start keeping a list of assets, now that someone else may need to access accounts.

When children join the family. Whether born or adopted, the entrance of children into the family makes an estate plan especially important. Choosing guardians who will raise the children in the absence of their parents is the hardest thing to think about, but it is critical for the children’s well-being. A nomination of guardian can make the transition smoother and prevent unnecessary delays in the court system during an already difficult time. A revocable trust may be a means of allowing the seamless transfer and ongoing administration of the family’s assets to benefit the children and other family members.

Part of business planning. Estate planning should be part of every business owner’s plan. If the unexpected occurs, the business will benefit from advance planning by having a set of procedures in place. The owner’s family will also be better off, regardless of whether they are involved in the business. At the very least, business interests should be directed to transfer out of probate, allowing for an efficient transition of the business to the right people without the burden of probate estate administration.

If a divorce occurs. Divorce is a sad reality for more than half of today’s married couples. The post-divorce period is the time to review the estate plan to remove the ex-spouse, change any beneficiary designations, and plan for new fiduciaries. It’s important to review all accounts to ensure that any controlling-on-death accounts are updated. A careful review by an estate planning attorney is worth the time to make sure no assets are overlooked.

Upon retirement. Just before or after retirement is an important time to review an estate plan. Children may be grown and take on roles of fiduciaries or be in a position to help with medical or financial affairs. This is the time to plan for wealth transfer, minimizing estate taxes, and planning for incapacity.

Reference: Cincinnati Business Courier (Sep. 4, 2019) “Estate planning considerations for every stage of life.”

Second Marriages Need A Plan to Protect Children and New Spouses

There are a number of issues in estate planning that are more important in second and subsequent marriages, as discussed in the article “Estate planning documents for second marriages” from the Cleveland Jewish News. A couple who each have children from a prior marriage are planning to marry again and blend their families. Consequently, the couple needs to address income taxes, a prenuptial agreement, pension and 401(k) benefits, Social Security, college funding, cost-sharing, and estate planning documents.

Here’s an example of how important estate planning is for blended families. A couple who each have children from their prior marriages get married. Twenty years later, the husband dies. He had wanted to provide for his second wife, so his will stated that all his assets went to his wife. They had the understanding that on her death, those assets would go back to his children.

What actually occurred was that his wife lived a long time after he passed, and she simply combined their assets. When she died, the money went to her children, and her husband’s children received nothing. The husband’s children didn’t believe that he meant to do that, but because of the lack of planning, that’s exactly what happened.

What were the alternatives? He could have set up a marital trust that would have held the assets for his second wife on his death, but upon the wife’s passing, would have gone back to his children. The trust document could prohibit the wife from transferring the assets in the marital trust to her children, and instead, guarantee that any assets remaining at her death would go to his children.

It’s wonderful to have a verbal agreement with your spouse, but if you don’t set up a formal legal plan, there’s no way to be sure that assets will be distributed as intended.

Another way to ensure that children from a blended family receive what they are intended is to have an independent person or entity, like a bank or a trust company, oversee a marital trust.

Other important documents include a durable financial power of attorney, durable health care power of attorney and a living will declaration.

Just as important as remarriage, anyone who has been divorced needs to review their estate planning documents to ensure that they reflect their new marital status, especially when they marry again. That is also the time to review beneficiary designations that appear on insurance policies, 401(k)s, pensions, retirement accounts, and investment accounts.

There’s no “set it and forget” plan for estate documents, so before you walk down the aisle a second time, or shortly after you do so, speak with an estate planning attorney to clarify your goals and put them into the appropriate estate planning documents.

Reference: Cleveland Jewish News (May 7, 2019) “Estate planning documents for second marriages”

Remaining Fair in Estate Distribution

Treating everyone equally in estate planning can get complicated, even with the best of intentions. What if a family wants to leave their home to their daughter, who lives locally, but wants to be sure that their son, who lives far away, receives his fair share of their estate? It takes some planning, says the Davis Enterprise in the article “Keeping things even for the kids.” The most important thing to know is that if the parents want to make their distribution equitable, they can.

If the daughter takes the family home, she’ll need to have an appraisal of the home done by a certified real estate appraiser. Then, she has options. She can either pay her brother his share in cash, or she can obtain a mortgage in order to pay him.

Property taxes are another concern. The taxes vary because the amount of the tax is based on the assessed value of the real property. That is the amount of money that was paid for the property, plus certain improvements. In California, property taxes are paid to the county on one percent of the property’s “assessed value,” also known as the “base year value” along with any additional parcel taxes that have become law. The base year value increases annually by two percent every year. This was created in the 1970s, under California’s Proposition 13.

Here’s the issue: the overall increase in the value of real property has outpaced the assessed value of real property. Longtime residents who purchased a home years ago still enjoy low taxes, while newer residents pay more. If the property changes ownership, the purchase could reset the “base year value,” and increase the taxes. However, there is an exception when the property is transferred from a parent to a child. If the child takes over ownership of the home, they will have the same adjusted base year value as their parents.

If the house is going from the parents to their daughter, it seems like it should be a simple matter. However, it is not. Here’s where you need an experienced estate planning attorney. If the estate planning documents say that each child should receive “equal shares” in the home, each child receives a one-half interest in the home. If the daughter takes the house and equalizes the distribution by buying out the son’s share, she can do that. However, the property tax assessor will see that acquisition of her brother’s half interest in the property as a “sibling to sibling” transfer. There is no exclusion for that. The one-half interest in the property will then be reassessed to the fair market value of the home at the time of the transfer—when the siblings inherit the property. The property tax will go up.

There may be a solution, depending upon the laws of your state. One attorney discovered that the addition of certain language to estate planning documents allowed one sibling to buy out the other sibling and maintain the parent-child exclusion from reassessment. The special language gives the child the option to purchase the property from the other. Make sure your estate planning attorney investigates this thoroughly, since the rules in your jurisdiction may be different.

Reference: Davis Enterprise (Oct. 27, 2019) “Keeping things even for the kids”