Message Font: Serif | Sans-Serif
No. of Recommendations: 0
<< My mother worked for AT & T during the 50's and early 60's and participated in employee stock ownership. She has kept the stock all these years and through splits, divestitures, spinoffs and drip, there is a sizeable amount of equity. >>

Now THAT's long-term buy and hold. Good for her.

<< Her accountant says she would be better off leaving it to us children rather than back-calculating capital gains, which may be substantial. I suspect his real motivation is he doesn't want to do the complicated work and I would rather see my mother have access to the funds. >>

Your mother has access to the funds and she seems to be happy with the situation. If she wants you to have proceeds from this stock, the accountant's right. If you inherit stock upon her death, you inherit it with a basis of market value as of the date of death. If she sells it, she pays tax on the gain. I wouldn't get too suspicious of the accountant's motives since he's giving good advice about disposition of the stock.

<< Is he right and are there any other options? For instance can she move the equity into a trust and borrow against it? >>

I imagine your mother could find lots of sources of loans using the stock as collateral. There would be no need to put things in a trust for that purpose. She can also sell stock as she needs to supplement her other income.

You don't mention your mother's total assets, her cash flow, or what she wants to happen when she's gone, so it's hard to give further advice. She should definitely see someone about estate planning if she hasn't already done so.

Phil Marti
Print the post  


In accordance with IRS Circular 230, you cannot use the contents of any post on The Motley Fool's message boards to avoid tax-related penalties under the Internal Revenue Code or applicable state or local tax law provisions.
What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and Glassdoor #1 Company to Work For 2015! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.