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52 votes
Accepted

What is an escrow and how does it work? Practical example

In simple terms, "escrow" is just a way to make sure the seller gets his money and the buyer gets the house (or goods, or whatever is being purchased). It's a way to avoid fraud and other ...
Rocky's user avatar
  • 24.1k
19 votes
Accepted

Disclaiming part of an Inheritance

If I'm the executor and one of the two kids that got an inheritance, can I disclaim 1/3 of my inheritance it and give it to the other child that didn't get anything? As executor you are required to ...
mhoran_psprep's user avatar
14 votes

What is an escrow and how does it work? Practical example

Suppose I want to buy a house from person X. Person X is willing to sell me his house for 200 k$. I don't have this money, so I need a mortgage. I go to my bank to obtain a mortgage. How does the ...
David Schwartz's user avatar
9 votes

What is fair between 10 owners of an estate?

Rent doesn't give you any ownership in a property, so is largely irrelevant here. If you were paying rent after the death of your parents, that money would go to the owners of the house (which may ...
ChrisInEdmonton's user avatar
8 votes
Accepted

Distribution of Estate Assets

Just add it all up. The assets in the estate are worth $105,000. Splitting that equally means that each beneficiary gets $52,500. The one who gets the car gets a car worth $5000 and the rest in cash, $...
Pete Becker's user avatar
  • 5,502
7 votes
Accepted

Value of mother-in-law cottage for purposes of will

You should value the unit at: The fair market value of the whole property in 1983 (or whenever 25 years ago was) minus what the eldest sibling paid for the whole property minus the expected value in ...
Rupert Morrish's user avatar
7 votes

Disclaiming part of an Inheritance

You can gift your share to whoever you want, and will be liable for gift tax on the gift. Otherwise, you should probably talk to an estate attorney about invalidating the superseding will.
littleadv's user avatar
  • 177k
6 votes

What is an escrow and how does it work? Practical example

Along with mortgage payments you have property taxes and insurance premiums related to the house that are paid once or twice a year. To normalize the monthly payment many people choose to have these ...
Hart CO's user avatar
  • 70.5k
6 votes
Accepted

Is an uncashed cashiers check of deceased mother part of her estate wrt probate

Generally cashiers checks do not expire, since they are "like cash" and fully funded at the time of issue. However, whether they can be cashed after a long period of time (and also what the definition ...
TTT's user avatar
  • 47.2k
6 votes

Distribution of Estate Assets

The second one is correct. One way of getting there is that A simply buys the car from the executor of the estate for $5000. The estate is now $105000. The estate gets split two ways, with A and B ...
Simon B's user avatar
  • 10.4k
5 votes

Appointment of a trust executor

Contact the trust departments of your local banks and find out what they offer. Determine what their annual trust administration fee is as well as possible fees for investment management (...
Bob Baerker's user avatar
  • 76.7k
4 votes

What is fair between 10 owners of an estate?

If your sister paid rent, she was a tenant. There are laws to protect tenants, but those depend on what country, state, and city you live in. In most places in the US (maybe all), she was owed more ...
Karen's user avatar
  • 455
4 votes

Should an IRA be disclaimed to allow it to be distributed according to a will?

There are two different possible taxes based on various scenarios proposed by the OP or the lawyer who drew up the OP's father's will or the OP's mother. First, there is the estate tax which is ...
Dilip Sarwate's user avatar
4 votes

What is an escrow and how does it work? Practical example

Escrow solves the issue of trust between a buyer and a seller during a transaction. From the buyer perspective - what happens if I pay the money but I dont receive the good ? From the seller ...
vikingsteve's user avatar
3 votes

Life Insurance beneficiary

In the United States, the answer is no. Life insurance proceeds pass by operation of law. In fact, it would be a taxable event to pass it as a gift to the estate; your wife would have to pay the tax....
Dave Harris's user avatar
  • 4,277
3 votes

Should an IRA be disclaimed to allow it to be distributed according to a will?

She is very wrong. If the IRA is a traditional, i.e. A pretax IRA (not a Roth), all withdrawals are subject to tax at one's marginal rate. Read that to mean that a large sum can easily push her into ...
JTP - Apologise to Monica's user avatar
3 votes
Accepted

Questions about an estate inheritance in Florida

Sorry for your loss. Inheritance taxes are usually called estate tax, and estate tax is paid by the executor of the will (presumably you) out of the assets of the estate before the assets are divided ...
Dilip Sarwate's user avatar
3 votes

Transferring deceased owners IRA to my inherited IRA

Many assertions and statements in the OP's question don't match up with what one might expect to have happened and I am not sure if this is because the OP is using incorrect terminology or because he ...
Dilip Sarwate's user avatar
3 votes
Accepted

My Mother's Estate, a living revocable turst and Income Tax

I think it matters and I believe I am right. Who is right? Both are right. That said, the executor of the estate will take this out of the personal tax return, and the trustee will add it to the ...
littleadv's user avatar
  • 177k
2 votes

Mechanism for long-term control of estate distribution?

It seems like a potential solution would be to provide the distribution as annual stipends divided among the still-living beneficiaries. Each year, the beneficiaries who are still alive would receive ...
Dheer's user avatar
  • 57.1k
2 votes

Value of mother-in-law cottage for purposes of will

The cottage belongs to the owner of the main home. It was not left when they passed. The other assets are part of the estate and should be split via the will. If as you suggest, for some reason they ...
JTP - Apologise to Monica's user avatar
2 votes

Appointment of a trust executor

Coming years later, and with no accepted answer, this is likely for the benefit of others, but nonetheless... First, it's important to understand that an "executor" oversees the disposition ...
u2n's user avatar
  • 121
2 votes

Distribution of Estate Assets

Yet another way of looking at it (they all essentially amount to the same) is that: The total estate is valued at $105,000 ($100,000 cash + $5,000 car). Give the car to A and match it with $5,000 ...
TripeHound's user avatar
  • 9,170
2 votes

How to properly account for a leased property where the tenant has the option to buy

Anything that lets someone do something with your property is an asset to that person, and a liability to you. So both the lease and the option are assets to the tenant, and liabilities to the estate. ...
Acccumulation's user avatar
2 votes

Life Insurance owner deceased; insured still alive

My guess would be that you got that information by calling a toll free number for the insurance company where you're less likely to get people used to dealing with non-standard circumstances like ...
WittyID's user avatar
  • 2,023
1 vote

What is an escrow and how does it work? Practical example

If you have ever used eBay or internet shopping between two individuals, it is an example of escrow. Both the buyer and seller want to complete a sale, but do not trust each other. If the buyer sends ...
qwr's user avatar
  • 111
1 vote

What is an escrow and how does it work? Practical example

Not that it directly bears on the question, but since it has come up a number of times in comments and answers, there is another aspect to the use of an escrow account to hold tax and insurance money ...
Jeorje's user avatar
  • 11
1 vote

Tax implications of a Transfer on Death Deed

Disclaimer, I am no lawyer and found this information online. This is consistent with information that I have read on the subject. The cost basis for the property is "stepped up", so it ...
Pete B.'s user avatar
  • 76.7k
1 vote
Accepted

How to properly account for a leased property where the tenant has the option to buy

Just to close this out with what was actually submitted in the estate inventory. First, in the state where the estate is, property tax assessment was an acceptable "fair market value" for the ...
Eric's user avatar
  • 3,642
1 vote

Maximizing the Cost Basis Reset on Death

I don't know how you presented the question to your attorney, but there is a step up in basis when one spouse dies. From WHEN ASSETS GET A ½ STEP-UP IN COST BASIS However, what happens to assets ...
JTP - Apologise to Monica's user avatar

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