02 Feb Mom put me on her bank accounts. Are there taxes when she dies?
Photo: pixabay.comQ. My widowed and elderly mother has added me to her bank accounts. Her will evenly divides her assets between me and my only sibling. Since I’m a joint owner of these bank accounts, will splitting them with my sibling when our mother dies be viewed as a gift by tax authorities and create an unintended tax liability for my sibling?
— Daughter
A. Adding someone’s name to an account is a common estate planning move.
Your question is well founded, but the tax liability will not fall on your sibling.
As a joint owner of the accounts, you will become the sole owner upon your mother’s death if you survive your mother, said Tom Szieber, a trusts and estates attorney at Herold Law in Warren.
But, he said, the proposed split of the accounts will result in a gift from you to your sibling.
It won’t necessarily cause a taxable event, though.
Szieber said if you give your sibling more than the annual exclusion in the year of the gift — $16,000 for 2022 — you would be required to file a federal gift tax return.
Any amount of the gift in excess of $16,000 will reduce your lifetime unified gift/estate tax exemption, which is $12.060 million in 2022, he said.
You would not be required to pay any tax unless you use up your entire exemption, he said.
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This story was originally published on Feb. 2, 2022.
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