The Motley Fool Discussion Boards
Financial Planning / Tax Strategies
|Subject: Re: Joint tenant effects?||Date: 10/3/1997 12:38 PM|
|Author: TMFTaxes||Number: 449 of 123001|
<<As a simple and temporary will, since I have no dependents, I'm considering adding a family member (my father) to my brokerage account as a joint tenant with rights of survivorship. By being the first tenant, I would still pay the taxes, but if I were to meet some untimely fate I wouldn't have to worry about dying intestate. My concern is that, since the value of the account is over $10k, the IRS will consider this to be a taxable gift. Can someone give me the lowdown on this situation? Are there distinctly
better ways to do this, aside from a normal will? Thanks in advance for any help.>>
If you are concerned about dying without a will, Drew, the best way around that issue is to create a will. That way you'll be able to direct your assets to whomever you please. Creating a simple Joint Tenancy generally does not create a "will".
You may also be concerned about probate taxes (I don't know what that situation may be in YOUR state, since those issues are state specific). You'll have to check with your state laws to see if you will be subject to probate. If not, you don't have to mess around with the JT status on your account (at least at this time).
Transfers of certain types of assets into joint tenancy are considered completed gifts when made. Other transfers are considered completed only when withdrawn by tne non-contributing joint owner for his/her use. In general, brokerage accounts are not treated as a completed gift until the non-contributing joint owner withdraws the funds and uses them for his/her benefit. So simply creating the JT will not trigger a gift tax return, since the gift is not completed.
But...you may also place in jepor