topic Re: Inheritance or Gift? in After you file

Inheritance or Gift?

wesaabs4 — Mon, 21 Jul 2025 21:01:23 GMT

My father has a will that stipulates his estate go to me and my three siblings (my mother is deceased). I am on his bank account. When he passes and I divide the bank account evenly between the four of us, is that considered my gifting them the money? I read somewhere that if there is a will listed all of us as beneficiaries, then it wouldn't be considered a gift, and therefore not a taxable event for them or me. Is that correct?

Re: Inheritance or Gift?

M-MTax — Mon, 21 Jul 2025 21:51:07 GMT

You are going to have a problem if that bank account is in your father's name and your name as JTWROS (or is a TOD account) as that would pass outside of the will.

Re: Inheritance or Gift?

Opus 17 — Mon, 21 Jul 2025 23:10:37 GMT

If he made you a joint owner of the bank account, that might have been a gift at the time he made you joint owner.

The money will pass entirely to you outside the estate, and you have no legal obligation to divide it. If you do divide it, that is a gift from you to your siblings. However, you only need to file a gift tax return if the amount is more than $19,000 per person per year, and even if you do need to file a gift tax return, no gift tax is actually paid unless your lifetime total of gifts and estates is more than about $15 million.

If there's so much money in the account that you are worried about a gift tax return, you might discuss that with an estate planner, or have your father put some money into an investment account instead of holding it in a checking account. An investment account can have designated beneficiaries so it also passes to the beneficiaries directly instead of being part of the estate.

Re: Inheritance or Gift?

M-MTax — Mon, 21 Jul 2025 23:21:03 GMT

@Opus 17 wrote:
If he made you a joint owner of the bank account, that might have been a gift at the time he made you joint owner.

Only to the extent funds were (or are) withdrawn.

@Opus 17 wrote:
The money will pass entirely to you outside the estate, and you have no legal obligation to divide it.

We don't know that since we don't know how the account is being held.

Re: Inheritance or Gift?

wesaabs4 — Tue, 22 Jul 2025 13:32:21 GMT

OK, thanks!