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Edith: We recently lost our mother rather unexpectedly at age 85. She owns a house in New Jersey, in which there is no mortgage or liens that we are aware of. There are some outstanding credit card bills, etc., approximately $17,000 that we imagine will have to be paid off. She had no life insurance.
I am the executor of her will, and per her wishes, our mother gave us three children equal shares of the all the assets. We would like to use the equity in the house to pay off her debts once the title (deed?) is transferred. Is there a way to prevent any tax liability or do you recommend another way that this matter can be handled to allow minimal taxation- inheritance tax, etc.? Would you recommend starting a trust with all three children named as co owners? Would a reverse mortgage be of any value?
Please offer any help in estate planning to make this very difficult time for us easier. |
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If your mother died this year, there won’t be any federal estate tax on the first two million dollars of her estate. I suspect there won’t be any New Jersey tax due either. Eleven other states levy inheritance tax on heirs, though, so some of you might run into that depending on where you live.Estate planning comes before a death, not after. Reverse mortgages are meant for seniors who wish to remain in their homes and have nothing to do with your situation. If you’ve come in to a great deal of money, discuss trusts with your own financial planners. If not, simply hire a lawyer in your mother’s town to help settle the estate |
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Edith
Originally published on June 6, 2006 |
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