joint tenancy on stocks problem

[dahhling]

undefinedWhat is the name of your state?
Illinois
I'm executor of my mothers estate. Fortunately she is still alive and well. There are nine children to divide the estate. It seems the easiest way to handle this is to put her accounts into joint tenancy. What do I do with stocks?
Dahhling

 

[anteater]

undefinedWhat is the name of your state?
Illinois
I'm executor of my mothers estate. Fortunately she is still alive and well. There are nine children to divide the estate. It seems the easiest way to handle this is to put her accounts into joint tenancy. What do I do with stocks?
Dahhling

Since mother is alive and well, you are not Executor yet. Careful with the "I" stuff. I hope you meant that to mean that you were only giving advice to your mother.

Are you saying that you are going to add 9 new owners to each of your mother's accounts, for a total of 10 owners? I would think long and hard about that.

Two issues you should think about:

1) Adding joint owners would be gifts to the new joint owners. You may have gift tax, medicaid eligibility, etc to worry about.

2) With regard to stock or other investments, you would be pretty much blowing the benefits of a step-up in cost basis upon your mother's death. The new joint owners by gift would take on your mother's cost basis. Only your mother's remaining 10% share would receive a step-up.

Get thee to someone well-versed in estate planning.

 

[dahhling]

Mom asked me to be executor, so what is an executor in waiting called?

The idea for banks and moneymarket funds was to have it listed as joint tenancy with rights of suvivorship going to me. Then I would divide it 9 ways.

Are you saying this would not be considered inheritance if done this way?

Currently it's under a TOD (transfer on death) agreement at the financial planners. Think we should leave it that way?

Thanks

 

[seniorjudge]

Q: Mom asked me to be executor, so what is an executor in waiting called?
A: There is no term for that.

Q: Are you saying this would not be considered inheritance if done this way?
A: No, anteater did not say that.

Q: Currently it's under a TOD (transfer on death) agreement at the financial planners. Think we should leave it that way?
A: This is a question you should ask your tax CPA. Aside from the tax implications (I am NOT a tax attorney), putting an asset in 10 names is asking for a lawsuit.

 

[anteater]

What I guess I am saying is that using joint tenancy as the primary means of estate planning is a pretty blunt instrument. And it has the potential to snap back and pop you upside the head. Maybe it's reasonable if the dollar amounts are small and the number of potential heirs are very limited.

OK, you aren't going to make all nine siblings joint owners. Just you. That still makes you an owner of those accounts. What happens if:

1) You divorce?
2) You run over and kill a 30 year old investment banker making $1 million a year who has a wife and 3 children?
3) One or more of your siblings predecease your mother? When the time comes for you to divide up that money, will you include the predeceased siblings' spouse and/or children? And, if you do, will all your other siblings be OK with that? Yes, if you are JTWROS on the accounts, they are legally your's upon your mother's passing and you can do what you want. But, will you be OK with any possible hard feelings stemming from your decisions?

(If you are JTWROS on your mother's accounts, I don't know if, technically, it is an "inheritance" for you. But, if you then give your siblings a portion, that is a gift from you to them. Whether that makes any real difference depends upon the amounts and your own financial situation.)

 

[dahhling]

Talked to mom's financial planner from Edward Jones. Her assets are around 220K at present, she's 86 and were hoping for at least 14 more years.
They think the TOD is the way to go and that's how it's set up at present.

The condo is going to 1 of the nine kids, so there are 8 siblings to split the potential 220K. Which btw is combo of mm and stocks. My concern is about the stocks. They would be transfered to 8 people upon her death, someone said potential law suit. I don't understand why. Is there another way to do a simple split or is 'simple' an oxymoron in this case?

Thanks