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Unintended Gift Tax

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    Unintended Gift Tax

    Elderly woman died in 2010, leaving 100 acres of land. Value appx $1.5 million.

    JimBob wanted the farmhouse, BettyBob wanted acreage adjoining her. Neither cared about the rest of the land, so BillyBob ended up with 75 acres. The value of BillyBob's portion was appx 60% of the value of the entire estate. The will called for "somewht equal and satisfactory" division of the estate, and did not mention dollar values, nor did it use the terminology "equitable."

    Do JimBob and BettyBob have a "gift tax" problem? If so, what is the best way to combat it? I'm thinking if they can make an economic case for their portions, they may have a winner.

    #2
    As long as both of the bene's agree on its division and sign off on that, there should be no problem. It's an inheritance. I would recommend that the signing off include a statement that they agree not to contest the allocation once it is settled between them. I had a case where the will was re-written shortly before the owner's death, and the atty/paralegal made a mistake which changed the allocation to other than the decedent intended and her two children had always understood it to be. The decedent was very ill and knew she was dying -- which she did 4 days later, so it is understandable she did not catch one word. The benes both agreed to abide by the original intent of the former will and the lawyer who handled the estate indicated that it was no problem as long as they both agreed and signed off on it. (Of course he never admitted making the error.)
    Last edited by Burke; 08-23-2010, 11:44 AM.

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