My Step Mother passed away recently. Her will stipulates how her assets are to be distributed to the heirs. All her assets have been liquidated and the monies were deposited into her checking account. Her Checking account had a Payable up on death beneficiary, her biological son. All the money is legally going to him tax free as it is an inheritance below the taxable amount. He wants to honor the will and distribute the monies to the named heirs. The question is, if he does that, would the distributions to the heirs be considered inheritance or a gift since the money passed through him rather than coming directly from the estate? The amount would be greater than the $15,000 annual gift allowance.
