Can I allow my mother to sell land I am meant to inherit?

[notaclue2018]

My grandmother died 10 years ago and in her will left some land to my mother which she stipulated must in turn be left to me when my mother dies.

However i am not a US citizen, I do not live in the US and i really have no desire to inherit this land. Instead my mother and I would much rather sell the land and transfer the profits (after tax) to the UK (where we live) so i could inherit the money in british pounds in due course (therefore honouring the spirit of my grandmother's intentions).

In the UK this is fairly straightforward to do as all the beneficiaries consent to the change, but i am not clear how things work in the US. Would anything bad happen if my mum just sold the land?

The land is in Nebraska.

Any thoughts appreciated.

 

[FlyingRon]

You need to contact an attorney in Nebraska to review the will and the transfer to your mother to see if that stipulation is enforceable.

 

[HRZ]

DEtails matter a lot...and we don't have those...and you don't seem quite sure .....and the TAX consequences of acting too soon may most unpleasant ..and not reversible .

ONe common way of implementing what you describe is in place is that grandmother willed the land to you with a life estate reserved for mom. A requirement in GMs will that mom must pass it to you would be rather unlikely and of questionable legal enforceability if Mom wanted to change her mind. BUt possible .

IF mum holds a life estate she can sell but a life estate, together you could agree to sell the whole ...but that may be most unpleasant tax result. DItto, if mum surrenders her life estate , you could sell the whole but with unpleasant tax consequences .

IF it is a life estate and IF there is considerable increase in value in last 10 years I urge you to get accurate answers as to various tax consequences . IN general the US tax code gives a big window for tax free passing of assets to next person at death of donor at free step up in basis to current market value . And mum could not arrange an earlier sale and transfer equivalent value to you upon her death because she you notmget that tax benefit while alive . IF The values have not increased in 10 years..the tax issues are different and perhaps a much lesser consideration.

 

[notaclue2018]

Gosh that all sounds unbearably complicated - which is exactly why i have no desire to deal with this sort of stuff when my mother passes away. We clearly need professional advice. Why is everything to do with the US tax and legal system more complicated than it needs to be?!

Anyway, thank you for your time.

 

[HRZ]

PS even ft here is such requirement visited upon Mom as a moral or legal requirement to pass it to you , a review of if the requirement is enforceable or not might be smarter reviewed in parallel with the tax consequences especially if values went up in 10 years !

Conversly if values are flat...the tax consequence of an earlier sale may be moot .

There might be other factors due to convoluted access and recovery to medical care , especially Medicaid ..in short if mum comes into counted assets that can be a bar to public sector benefits and even to give them away invites a draconian minefield of disqualification times and rules and or recovery at end of line .

BE careful !

 

[notaclue2018]

PS even ft here is such requirement visited upon Mom as a moral or legal requirement to pass it to you , a review of if the requirement is enforceable or not might be smarter reviewed in parallel with the tax consequences especially if values went up in 10 years !

Conversly if values are flat...the tax consequence of an earlier sale may be moot .

There might be other factors due to convoluted access and recovery to medical care , especially Medicaid ..in short if mum comes into counted assets that can be a bar to public sector benefits and even to give them away invites a draconian minefield of disqualification times and rules and or recovery at end of line .

BE careful !

Thank you that's very interesting. We aren't too bothered about paying capital gains and so on. The main thing is to remove the hassle for me down the line (I don't have a US bank account, for example, so it I imagine it would be a nightmare dealing with all this stuff from a distance). My mother is UK domiciled now (she hasn't lived in the US for over 35 years) so things like medicaid are not a concern either.

 

[HRZ]

IN general US taxes, if any, are born by the donor or decedants estate ....but of course the government sometimes wants to be sure taxes are paid before funds disappear offshore..and there may be additional reporting requirements ...well beyond me .

 

[HRZ]

I think you are letting the tail wag the dog ...and right now you don't know exactly how the land is deeded which is a major clue as to if there is a life estate in place. You don't know who is selling what !

THe international movement of funds is pretty darn easy as a comparative question.

Getting a power of attorney from foreign soil suitable for us agent to convey land. ( and suitable to title insurance ) can involve a few extra hoops...last time I saw that was long ago, my mom got POA at embassy complete with red ribbons and real wax seal ..the seller will need to get it right . And realtors around me handle sales or purchases for offshore sellers and buyers ... I'm sure it's not rare in Nebraska ...may even be quite common.

Capital gains don't matter..unless you get an unexpected bite ...and I don't like unnecessary sharing of my family pot with Federal and state government. ..at say 25% ...I lay it out ahead.

 

[Taxing Matters]

My grandmother died 10 years ago and in her will left some land to my mother which she stipulated must in turn be left to me when my mother dies.

In the U.S. typically such provisions in a will are not enforceable. Once the property is distributed to the initial beneficiary that beneficiary is generally free to do with the property as he or she pleases. To accomplish what your grandmother tried to do would typically require use of a trust in the U.S. Did you grandmother reside in the U.S. when she died? If so, in what state did she reside at the time she died?

 

[Zigner]

In the U.S. typically such provisions in a will are not enforceable. Once the property is distributed to the initial beneficiary that beneficiary is generally free to do with the property as he or she pleases. To accomplish what your grandmother tried to do would typically require use of a trust in the U.S. Did you grandmother reside in the U.S. when she died? If so, in what state did she reside at the time she died?

...or a life estate. Knowing how the property is titled is key.

 

[notaclue2018]

In the U.S. typically such provisions in a will are not enforceable. Once the property is distributed to the initial beneficiary that beneficiary is generally free to do with the property as he or she pleases. To accomplish what your grandmother tried to do would typically require use of a trust in the U.S. Did you grandmother reside in the U.S. when she died? If so, in what state did she reside at the time she died?

Thanks for your comments - I will need to look into this. We are going to review the will etc and contact a Nebraska attorney to see what we can find out. It's all a bit of a mystery to us - but thank you, now we have these comments we have some idea of the type of issues we need to look out for.

 

[notaclue2018]

In the U.S. typically such provisions in a will are not enforceable. Once the property is distributed to the initial beneficiary that beneficiary is generally free to do with the property as he or she pleases. To accomplish what your grandmother tried to do would typically require use of a trust in the U.S. Did you grandmother reside in the U.S. when she died? If so, in what state did she reside at the time she died?

She was a US resident and she died in Nebraska, which is where the land is also. We will need to look at the precise detail of the will to find out more. Thank you for your comments.

 

[notaclue2018]

I think you are letting the tail wag the dog ...and right now you don't know exactly how the land is deeded which is a major clue as to if there is a life estate in place. You don't know who is selling what !

THe international movement of funds is pretty darn easy as a comparative question.

Getting a power of attorney from foreign soil suitable for us agent to convey land. ( and suitable to title insurance ) can involve a few extra hoops...last time I saw that was long ago, my mom got POA at embassy complete with red ribbons and real wax seal ..the seller will need to get it right . And realtors around me handle sales or purchases for offshore sellers and buyers ... I'm sure it's not rare in Nebraska ...may even be quite common.

Capital gains don't matter..unless you get an unexpected bite ...and I don't like unnecessary sharing of my family pot with Federal and state government. ..at say 25% ...I lay it out ahead.

Thank you. I can see I definitely need to find out a lot more detail - sadly I'm in the office at the moment and don't have access to the Will or any additional information. We will look it up later and consult with an attorney. Moving money around is straightforward - but it is quite complicated figuring out the dual UK and US tax implications of this kind of inheritance which is why we have a preference to move the money to the UK, where I would subsequently only have to deal with one set of tax rules myself! I agree the US system is fairly straightforward in and of itself, but inheritance tax and capital gains tax in the UK can be quite messy indeed. In any case I would like need to sell the land very quickly myself in order to be able to pay the subsequent tax bill in the UK. Without any prior knowledge or local context I think I would struggle to deal with the prompt sale of a farm thousands of miles away from me (I work full time, I have a young family, I suffer from mild anxiety at the best of times - so I could really do without this stress in my life).

 

[Taxing Matters]

She was a US resident and she died in Nebraska, which is where the land is also. We will need to look at the precise detail of the will to find out more. Thank you for your comments.

Look at the will and see exactly what the will says. If I know that I can give more helpful feedback on it.

But note that in practical terms it likely does not matter a whole lot. The provision in the will that said your mother is to pass the property to you is a provision that, if enforceable, would benefit only you. So it generally wouldn't be a problem for your mother to sell it and give you the cash later if you don’t object to that. There isn’t some government body that will step in to independently enforce the will, after all. If you don't make an issue of it, no one else will be in a position to mount a challenge to it.

 

[Zigner]

Thank you. I can see I definitely need to find out a lot more detail - sadly I'm in the office at the moment and don't have access to the Will or any additional information. We will look it up later and consult with an attorney. Moving money around is straightforward - but it is quite complicated figuring out the dual UK and US tax implications of this kind of inheritance which is why we have a preference to move the money to the UK, where I would subsequently only have to deal with one set of tax rules myself! I agree the US system is fairly straightforward in and of itself, but inheritance tax and capital gains tax in the UK can be quite messy indeed. In any case I would like need to sell the land very quickly myself in order to be able to pay the subsequent tax bill in the UK. Without any prior knowledge or local context I think I would struggle to deal with the prompt sale of a farm thousands of miles away from me (I work full time, I have a young family, I suffer from mild anxiety at the best of times - so I could really do without this stress in my life).

A possibility that you may not have considered is to simply not take possession of the property at all...

ETA: In other words, you can refuse the gift.