Pay on Death

[kattbird]

What is the name of your state? MD

I wasn't sure what topic to put htis under. If you are the Pay on death person for any CD's or brokerage account as mom is right now, do you have to pay taxes on it? Or inheritance tax? I don't know if you would really consider it an inheritance since she was the beneficiary.

 

[anteater]

An inheritance tax is a tax on the value of property transferred from the deceased to beneficiaries. Therefore, that includes property passing by way of a will, intestate succession, living trust, beneficiary designation, etc.

Maryland's inheritance tax exmpts transfers to lineal descendants, parents, and grandparents. Also, transfers to spouses and siblings. Therefore, whether an inheritance tax is due on these CD's and brokerage accounts that your mom will be inheriting will depend upon who she is inheriting from.

(By the way Maryland also has an estate tax that comes into play if the gross estate is valued at $1M or greater. An estate tax is a tax on the value of an estate. Technically, that is different from an inheritance tax, although the two terms are often confused.)

 

[Dandy Don]

Depends on what the total amount of the assets are. Generally if the amount is under $2 million, there is an automatic exemption on federal income taxes. State income taxes, however, are another matter. You will need to consult with a CPA or tax accountant who has experience with estates to get your question answered.