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Hello ALL:

I was up late last night and out of the blue an idea hit my coffee soaked mind. I could use DSP's/DRIPS to transfer wealth outside of an estate using (JTWROS) joint tenancy. For instance: an older man with stocks held in street name could have the certificate sent to himself and could jointly enroll a family member in the DRIP plan with transfer agent. The DRIP could be funded from either party and grow. Upon the death of the grantor/ older man the DRIP plan would be the right of survivorship for the family member and would be passed outside of probate.

Is this workable? and where can I get more info on this type of play? please feel free to add your comments.

james


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[[Hello ALL:]]

Hi there, James...

[[ I was up late last night]]

Me too...got some bad pizza...

[[ and out of the blue an idea hit my coffee soaked mind.]]

Wow...I do some of MY best thinkin' on the "throne". But lets move on...quickly.

[[ I could use
DSP's/DRIPS to transfer wealth outside of an estate using (JTWROS) joint tenancy.]]

Oh really? Pray tell...

[[ For instance:
an older man with stocks held in street name could have the certificate sent to himself and could
jointly enroll a family member in the DRIP plan with transfer agent. The DRIP could be funded
from either party and grow. Upon the death of the grantor/ older man the DRIP plan would be the
right of survivorship for the family member and would be passed outside of probate.]]

Sure, the assets would be transferred outside of probate. But the value of the asset at the date of death would certainly be included in the estate of the decedent. And, not only that, if the surviving co-tenant didn't pay adequate fair market value of the shares when they were transfered, the person making the transfer could be making a taxable gift.

Unfortunately, this is the "poor mans" method of estate planning. It really stinks. I have to clean up one of these "estate plans" about once a month. If you have estate tax issues, your best bet is to engage the services of a qualified tax/estate pro. There are other ways to accomplish the same thing (i.e., avoid probate and, possibly, avoid estate tax as well), but it's certainly more complicated than a title transfer.

[[ Is this workable? and where can I get more info on this type of play? please feel free to add your
comments.]]

My comments are above. No where that I know of you can find any reading to "support" this type of play. In the alternative, most of the reading that you'll find will certainly say: "Don't Do It!!"

TMF Taxes
Roy

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james

<< Sure, the assets would be transferred outside of probate. >>

<< But the value of the asset at the date of death would certainly be included in the estate of the decedent. >>

The estate would pay estate taxes on the entire value of the stock. I assume only you funded the DRIP. Also assumed is that the estate is taxable.

This was truly a bad idea in an estate of which I am aware.

However, I do not clearly see good alternative.

Bill Stanley
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TMF Taxes and ALL:
OK OK I'm up late again. Let me start by thanking those that have responded to my earlier post.

My family has a trust and a second QTIP or "C" trust. I was looking for a way to max the 10,000 dollar gift and
add a little more in a safe cost friendly investment.

Be well,
James
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[[My family has a trust and a second QTIP or "C" trust. I was looking for a way to max the 10,000
dollar gift and
add a little more in a safe cost friendly investment.]]

So then give the cash and then have the child invest that cash in an appropriate DRIP account. It basically takes the funds out of your estate (maybe not...if under a custodial account), but may help you to meet your goals.

TMF Taxes
Roy
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