Living Trust, Will, POA, Executor Questions

[curb1]

The previous information ("The house equity is $100k. Money was gifted to brother, who I doubt paid any taxes on it") makes it imperative that this situation gets resolved immediately. Does brother consider this a loan or a gift? That needs to be clarified firstly. The longer you wait the messier this gets. There are now fairly easy solutions with good communication. Waiting until later the problems will get worse regardless of good intentions.

Mom would have been responsible for taxes on the gift (not brother), but there wouldn't have been taxes due. It would have been appropriate to file a Form 709 with the IRS.

 

[navy95]

In your case, I intended to refer specifically to the beneficiary designations for the IRA and bank accounts.

First, there is too high a potential for a brouhaha down the road among the beneficiaries and heirs when an agent under a POA uses his/her authority to make changes. Second, you might find that the IRA custodian and the financial institutions are reluctant to accept such changes for fear that they will later be sucked into a family feud. (Heck, they are often reluctant to accept an agent's authority at all.)

You said that you will be retaining an estate planning attorney and, I assume, that means for creation and execution of the POA document. Be certain that you discuss this aspect with that attorney so that the POA document contains language giving you the authority to make these kinds of changes.

Thanks for the direction--I'm going to have to use the atty for the POA, since I have no idea what I'm doing, even if I purchased software. My original intent was simply to put us all down as beneficiaries (I have no clue whether there are beneficiaries listed on the IRA or not), although that thinking changed a bit when considering factoring out my brother's potential stake on the inheritance. Assuming there are none listed now, do you think the IRA holder would have a problem if I/my mother established them?

 

[navy95]

The previous information ("The house equity is $100k. Money was gifted to brother, who I doubt paid any taxes on it") makes it imperative that this situation gets resolved immediately. Does brother consider this a loan or a gift? That needs to be clarified firstly. The longer you wait the messier this gets. There are now fairly easy solutions with good communication. Waiting until later the problems will get worse regardless of good intentions.

Mom would have been responsible for taxes on the gift (not brother), but there wouldn't have been taxes due. It would have been appropriate to file a Form 709 with the IRS.

I'm fairly certain my brother considers the money not so much as a loan, and not as a gift, but as my mother's equity in the house. So, a loan in essence. I'll email my brother to clarify the intent with the money so we at least have something clear in writing, for whatever good that may do.

 

[curb1]

It was a gift, not a loan. It is his at this time. Hopefully he will work with you (and Mom) for a desired(?) solution.

Is the house for sale? If it does sell, is brother willing to give Mom back the money she put into the deal? Does Mom want Son to return the gift? Is the title of the house in brother's name?

The bank accounts and IRA beneficiaries should be determined immediately. There is no problem for your mother to change the beneficiaries, but it has to be her decision.

 

[navy95]

Yes, I know in the eyes of the law, the money was a gift. I was trying to clarify what I believe to be (based upon previous discussions with him) his perception of the money.

No, the house is not for sale at this time--we are discussing what we need to do to get the house into market-ready condition. The intent is to either sell it, or rent it (duration also under discussion) at a profit. Brother is willing at this time to give the money back. As for whether Mother wants the money back--that's a question I haven't thought to ask her, which I need to do. I am fairly certain she will say that she would like it back. Title of the house is in brother's name.

Thank you all again for the feedback---it's helped me more than you know.