What is the better solution to dispersing joint checking account funds upon death of my mother?

If you gift before death, she will not get Medicaid because gifts trigger a penalty. Bear in mind there are costs with selling the house, the realtor often suggests some improvements to increase marketability. You will also have to pay the upkeep,taxes,utilities until the property sells and it can be a long time. For example in my city the house has to have a sump pump and hardwired smoke detectors prior to sale. $$$$$

I would suggest that you continue to keep the account(s) open, you are on the account and a signature and this will come in VERY handy over time.

About the house, if it is the only asset (which it sounds like) look into IF your state allows for "MUNIMENT OF TITLE". A muniment action is kinda like probate "lite" or low-cal version of full probate. If they have a valid will, and their only real asset for probate is the house (or a house & a car) and you are indicated as the executrix in the valid will and the will specifically names who gets the property and they are all still alive, you can file for a muniment to be able to legally have the property released and transfer the title of the property to whomever is indicated as per the will. Maybe 3 visits to the courthouse to file documents (usually no hearings) and if you reside in the county where the property is, you likely can do this yourself if you are comfortable in dealing with courthouse, and understand how property needs to be filed, etc. Muniment has a time frame in which to do, 6 months seems to be the norm and you have to have it all done within this short time frame too otherwise you have to go back and do full probate. Now some states do require an attorney to do anything probate, so find out if that is the case for you.

i'm assuming mom was NOT on Medicaid. If she was, that is a whole other set of issues to get past to be able to transfer the property. Medicaid, yes or no?

Medicaid is not a factor at this time. Not sure what a Muniment of Title is. The house will be sold and remaining preceeds will go to the heirs. Will be using a lawyer to assist with helping me probate the will.

Oh another couple of ideas….. after the house is transferred, you can sell it with the proceeds from the sale to go into the bank account you kept open. As psteg. said there will be costs to sell a property. Then once the property sells, everybody goes to a nice long lunch which toast mom & you pay for from the bank account, and then you divide the bank balance out equally and everybody is kum-ba-ya and all is documented. It is wonderful that mom set this up so you could do.

If there is no Trust, this estate will go to Probate. Better to get it into an irrevocable Trust now before she dies, then when she does, equal shares will be dispersed from the proceeds of the sale of the house and any remaining assets in the checking account. Don't do more work than necessary. Just make sure you have documents to back up all expenses and show where the money has gone and will be going. If you put this inheritance in a Trust, then there will be no Probate, court fees. Do it NOW!

Debralee, I have had the same question. I am on my mother's checking and savings accounts, so they should not have to go to probate. I plan to divide the money according to my parents' wishes. I have wondered if I just write checks to the heirs when my mother dies, would the money be seen as income. I don't know if there will be any money left, but I wouldn't want anyone to have to pay taxes on it because I didn't do things right. But I wouldn't want to put it in an estate account where money would be lost to probate.

Debra - when you go to sell a house, you need to have a clear title to be able to do so. Like if you have a mortgage, then the mortgage is paid off (cancelled) and this releases the title so the new person buying the house can get title. When they die and still own the home, the title is still in their name. So since they are dead, they can't sign anything, it needs to go through probate for this to happen. It's in probate court, where the judge will give an order or decree as to ownership of the property.

So say the Mary's will gives her home to her two kids which Mary owns outright, the probate judge will award the property so that the title is release to them 50-50. Then the kids can sell the house but they both have to sign off to do so. If there is still a mortgage, then the mortgage will have to be paid off before the title to the property is released. Probate has all sorts of requirements and costs. If there is a good bit of an estate, it will take months or years to close out probate properly. Really you do need an attorney to do this for you as it can get complicated.

But some states allow for an alternative to doing probate. Some states allows for a "small estates affidavit" and others allow for a "muniment of title" and some have other actions or multiple other ways to divest of assets without doing full probate.
Muniment of Title - if your state allows for this action - is an easy and relatively simpler way to legally transfer the ownership of the owned-outright home to whomever is named in their will to get the property. For some elderly, their only asset is their home and if there is no outstanding debt, then their executrix can do a MUNIMENT rather than going full probate. Muniment costs maybe $ 700.00 to 1K which is loads cheaper than full probate. You have to still do filings @ the courthouse but usually no hearings (and courtroom time & cost) and at the end you get whatever is legally needed to own the property so you can sell it or keep it.

A gift of money from one person to another is not counted as taxable income to the recipient. Assuming the amounts are not subject to any gift tax (only applies to very large amounts of money), it is simple just to divvy up the money after your mother's death. There is no reason to increase the probate estate by putting the money back into your mother's sole name.

A better arrangement is to have the account in your mother's sole name, with all three children as Pay On Death (POD) beneficiaries, and then give just you a power of attorney to access the account via check, etc.

JessieBelle, taxes owed will depend on the law in the state where your mother lives. In my state, there is a state inheritance tax with graduated rates depending on the relationship of the deceased to the heir. Closer relatives like children and grandchildren pay the lowest rates. When my MIL died, she had only cash assets in CDs and a checking account, which were split between my husband and his sister. Her estate was small so we could file what was called "informal probate" and basically we just had an attorney help us file the state inheritance tax. There is no income tax on inherited money. Accounts with a POD designation are distributed by the bank directly to the beneficiaries, but are subject to the inheritance tax. You could probably find information online about your state. Only about half of the states have an inheritance tax.

I would empty the account & open a new one in your name only. Once all expenses are paid, the home is sold, etc. etc. then I would share whatever is left with my siblings. Don't be too quick to cut them a check - you never know what fees and expenses will be lurking in the meantime.

I do agree with keeping something in reserve for the house sale. I just sold my parents home, where they lived for 40 plus years.house in great shape, no problems for the parents. On home inspection.. TONS of stuff that needed brought up to code.. like the chimney needed to be 3 inches higher (no lie). Water failed, septic tests (all passed, but they are rural and we were sweating it) luckily the buyer is a contractor and could do alot himself, but this cost us 8.ooo.oo and that doesent cover what he is doing. Not to mention fees, etc. Take your time closing things out!

Now that I know what a MUNIMENT OF TITLE is I do not think that can happen. My mother has deferred her taxes so there is a lien on her property. House is paid off. The estate and funds in her account are not enough to cause estate, inheritence or gift taxes. I will be going for informal probate with the guidance from an attorney. I guess the best solution would to just gift what ever remaining funds are left in the checking account to my sisters. Luckily my sisters are not money hungry for their inheritence. My mother does have an Ira, but that has beneficiaries. She also has a prepaid burial. My mother chose not to go with a POD account because she knew there might be expenses after her death that would need to be paid for and did not want those expenses tied up with the probate process. I am her POA, but that ends upon her death.

DebraLee - hmmm she deferred her taxes? Which taxes, like property tax?

i'm assuming it's the annual property tax. If property taxes, did it ever go to tax sale and how long ago & how many times?
or does the county deal with a deferral in a different way…like do they do some sort of conveyance which is filed or recorded against the property?

A lein has to be lifted or released before you can sell or properly transfer the ownership from her (her estate) to anyone else. Sometimes this is simply going to courthouse & into assessors office and paying the amount, interest (which can be significant) and fees and then walk the receipt over to the county clerk or chancery clerk's office or wherever they record land records. Then they record it and show the released lein so the property can be properly transferred to another. But sometimes it can be more complicated especially if it's a conveyance that was done. You should call the assessors office and ask what step-by-step needs to be done & also how they accept payment. Many assessors will not take a check if anything is in arrears or require a waiting period for the check to clear.
Good luck and please do post how everything is going.

Hi my mother past away 20 yrs ago. I live in NJ. She had a will that was filed with the Court. I am the executor of her will. I am in the process of selling her mobile home to which my siblings and I are heirs. What is the best way to distribute the proceeds from the sale of her property. Will i have to get open a checking acct under her Estate? Will there be an inheritance tax involved? any help would be appreciated. Thank you.

To the original poster: Just to throw something else out there that hasn't been mentioned - even if she has a prepaid funeral plan, there will be extra costs associated with her funeral and burial. Be sure you save enough money back to cover those, such as flowers, payments to officiants, limo rental, programs, certified copies of death certificate, opening and closing of the grave, newspaper death notices, thank you cards, postage, headstone and engraving and others I haven't even mentioned. Storage or transfer of her personal items from the house while you prepare it for sale. Closing costs after the sale. Keep the checking account open until the very last - you'll be surprised what unexpected fees there will be. There may even be last minute doctor or hospital bills. Good for you for planning ahead, not enough people do that and are overwhelmed.