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Old 09-07-2019, 05:32 PM
 
9,742 posts, read 16,055,479 times
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Quote:
Originally Posted by mathjak107 View Post
there is no tax on a bank account being passed unless the estate was over the federal and state limits .
Not so fast, Jak! It depends on the state.


When my mother died in Michigan, she left me a POD of about $60,000. although I didn't owe any FIT, Michigan claimed a portion. I forget how much, around $600. There were also a few checking accounts I held jointly with her, those were not taxed. Since they were held jointly, it was essentially my money. I just wrote a check off those accounts to CASH.


Regardless, they would owe no tax on the $46K, since it was constructively received by the recipient before the death, therefore, no longer a part of the POD. In that case, it was just a transfer. The remaining $1900 would pass to the recipient under POD, and would depend on the laws of the state as to if a tax was owed.


Not to worry, Michigan claimed their money right away! Actually, the bank paid them first, and I got the net amount. How 'bout that?
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Old 09-07-2019, 09:33 PM
 
852 posts, read 236,059 times
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Quote:
Originally Posted by mathjak107 View Post
The states themselves play a big part in deciding a path .....as an example New York years ago had only a 1 million dollar exclusion ... we were going up a million a year every year going forward until we hit the federal level .....when we saw an estate attorney he blew me away because I had no idea if you were over the limit in any year by 5% you did not pay on the overage ...you paid the estate tax from dollar one ....

We were over by a few million back then ....so he had us use something called disclaimer trusts which if need be allow us to pass 2x the state limit ....but the beauty is these trusts don’t activate unless the surviving spouse throws a switch up to 9 months after the death of the other ...

Then half the assets pass through an irrevocable trust and half normally.

So the best teacher is a great estate attorney
What would happen with the estate and a disclaimer trust if both parties die at the same time( as in an accident)?
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Old 09-07-2019, 10:23 PM
 
Location: SoCal
14,057 posts, read 6,724,733 times
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Quote:
Originally Posted by MaryleeII View Post
Not so fast, Jak! It depends on the state.


When my mother died in Michigan, she left me a POD of about $60,000. although I didn't owe any FIT, Michigan claimed a portion. I forget how much, around $600. There were also a few checking accounts I held jointly with her, those were not taxed. Since they were held jointly, it was essentially my money. I just wrote a check off those accounts to CASH.


Regardless, they would owe no tax on the $46K, since it was constructively received by the recipient before the death, therefore, no longer a part of the POD. In that case, it was just a transfer. The remaining $1900 would pass to the recipient under POD, and would depend on the laws of the state as to if a tax was owed.


Not to worry, Michigan claimed their money right away! Actually, the bank paid them first, and I got the net amount. How 'bout that?
Michigan doesn’t have estate tax unless your mother died before 1993.
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Old Yesterday, 01:45 AM
 
73,297 posts, read 73,074,368 times
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Quote:
Originally Posted by MaryleeII View Post
Not so fast, Jak! It depends on the state.


When my mother died in Michigan, she left me a POD of about $60,000. although I didn't owe any FIT, Michigan claimed a portion. I forget how much, around $600. There were also a few checking accounts I held jointly with her, those were not taxed. Since they were held jointly, it was essentially my money. I just wrote a check off those accounts to CASH.


Regardless, they would owe no tax on the $46K, since it was constructively received by the recipient before the death, therefore, no longer a part of the POD. In that case, it was just a transfer. The remaining $1900 would pass to the recipient under POD, and would depend on the laws of the state as to if a tax was owed.


Not to worry, Michigan claimed their money right away! Actually, the bank paid them first, and I got the net amount. How 'bout that?
there is more this story i think because , If someone dies in Michigan with less than the exemption amount (currently $11,400,000), their estate doesn't owe any federal estate tax, and there is no Michigan estate tax. The heirs and beneficiaries inherit the property free of tax.

some states have an inheritance tax not an estate tax that applies if the receiver lives out of state or has a certain relation to the deceased but i don't believe Michigan does
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Old Yesterday, 01:54 AM
 
73,297 posts, read 73,074,368 times
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Quote:
Originally Posted by Nik4me View Post
What would happen with the estate and a disclaimer trust if both parties die at the same time( as in an accident)?
it would have no effect , like any trust you set up that is never funded.

there may be provisions for an executor to have those same 9 months to throw the switch if needed but i am not sure
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Old Today, 09:09 AM
 
9,742 posts, read 16,055,479 times
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Quote:
Originally Posted by mathjak107 View Post
there is more this story i think because , If someone dies in Michigan with less than the exemption amount (currently $11,400,000), their estate doesn't owe any federal estate tax, and there is no Michigan estate tax. The heirs and beneficiaries inherit the property free of tax.

some states have an inheritance tax not an estate tax that applies if the receiver lives out of state or has a certain relation to the deceased but i don't believe Michigan does
Ok, my mother died in 1992 so things may have changed since then. Also, at the time, I lived in Texas.I just know MI did claim a $600 tax, which would have been about 1% of the total. So there's the "rest of the story"
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