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Author: TMFExRO Big red star, 1000 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 121572  
Subject: Re: Inheritance vs. Retirement? Date: 3/27/2000 3:50 PM
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<< 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.

TMF ExRO
Phil Marti
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