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3 siblings own property with survivors rights

Discussion in 'Joint Ownership' started by Getreal49935, Dec 25, 2020.

  1. Getreal49935

    Getreal49935 Law Topic Starter New Member

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    Jurisdiction:
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    My mother left us 4 siblings a parcel of land with ownership of the survivors. One sibling has passed so now there is 3 of us. My question is can one sibling give her share to one sibling or if she opts out does it automatically go to both siblings that are left?
     
  2. adjusterjack

    adjusterjack Super Moderator

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    Yes.

    It's not automatic (unless she dies). She would have to sign and record a quitclaim deed to convey her interest to either or both of the other siblings.

    She would also have to file a gift tax return on the fair market value of her interest (if she's not getting any money for it).

    There won't likely be any tax due if the amount is within the exclusion but the return still has to be filed.

    See:

    Gift Tax | Internal Revenue Service
     
  3. Zigner

    Zigner Well-Known Member

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    To clarify/expand upon the response above: This "giving" of the share of the property can be done before or after death. Before death, it's done as described by adjusterjack. After death, it can be done by way of a will or by way of a trust.
     
  4. Tax Counsel

    Tax Counsel Well-Known Member

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    Your facts are not clear, and the details matter very much. For example, if Amy, Becky, Chuck, and Dave all own equal shares of Blackacre together as joint tenants with a right of survivorship (JTWROS) and Chuck dies then his share of Blackacre ceases and Amy, Becky, and Dave end up still owning equal shares of Blackacre, only now their shares are larger because Chuck is gone. Notably Chuck cannot in in will give his share to just Becky because when property is owned JTWROS his share automatically ends and his will has no effect on that.

    On the other hand, if they all own their interests in Blackacre together as tenants in common (TIC) then Chuck can pass his interest in Blackacre to whomever he wants because with TIC his interest does not automatically terminate or go to the other owners. Rather, when owned TIC it goes to his estate and thus his will (if he has one) would determine to whom it goes. So if he gives it to Becky in his will, she'll get his entire share of Blackacre and Amy and Dave get nothing.

    Now, Chuck can give his share to Becky while he's alive if he likes. However, that may have the effect of breaking the JTWROS ownership as to Chuck's share of the property. So if Becky wants to own both her share and the share she gets from Chuck as JTWROS with Amy and Dave she and Chuck will want to see a real estate attorney to construct the transfer properly to achieve that goal. As noted by AdjusterJack Chuck's gift of the property to Becky may require him to file a federal gift tax return. Also, Becky would take his share of the property with the same income tax basis that Chuck had in it. There is no step up in basis for a gift during life like there is when property passes at death.
     
  5. zddoodah

    zddoodah Well-Known Member

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    Let's first be clear about the facts.

    On an unstated date, your mother died. Either by will or by intestate succession, she left a piece of property to you and three siblings. Presumably, her estate was probated and title to the property was transferred from your mother to the four of you such that title is now in the four of your names. Correct?

    You wrote that she left you the property "with ownership of the survivors," but it's not at all clear what that means. You should explain that.

    Then, at some unstated date after that, one of your siblings died. Was his/her estate probated? If so, was his/her interest in the property treated as an asset of the estate? If so, what became of his interest?

    Sibling A can give his/her interest to Sibling B and any time while they are both still alive. Whether any gift can be made after Sibling A dies depends on how you clarify the facts.

    This doesn't make much sense. Opts out of what?
     

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