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Member
Group: Forum Members
Last Login: 10/9/2009 1:02:49 PM
Posts: 7,
Visits: 20
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| I have a situation where the decedent and surviving spouse held a securities account in joint tenancy. They had also established and funded a revocable trust with community assets, but one-half of those assets is not enough to utilize the full estate tax exemption amount. In addition, they each have IRAs, the beneficiaries of which are the surviving spouse. There is no community property agreement in place. I believe there is nothing that can be done about the IRA accounts at this point, but would it be possible to take the position that the joint tenancy securities account was held in joint tenancy for convenience only and would therefore be available to add to the trust and increase the amount being funded into the bypass trust?
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Donita,
If the account funds originated from community property and there was no valid transmutation to separate property, you may have a chance. The issue is will you be disclosing the determination on the 706 and on the income tax returns when gain based on step up in basis is shown.
Nelson
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to add on to Nelson's comment- I have seen attorneys request court approval of this treatment... and have been told that this makes it harder for IRS to disagree
mike allmon
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Power Member
Group: Forum Members
Last Login: 3/12/2011 12:58:57 PM
Posts: 147,
Visits: 823
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If the account has been established for a long time, isn't it possible that there was an *oral* community property agreement? I thought that oral agreements were allowed if the agreement and the account predated some date in the early 90's when the law changed.
Mary Kay Foss
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You are right. The change was about 1980 as I recall and there is a court case a few years old on this issue.
That old rule should be considered.
Nelson
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