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Author: TMFTaxes Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 121326  
Subject: Re: DRIPS as mini trusts? Date: 11/18/1998 8:19 PM
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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!!"

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Roy

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