Question about cash funds remaining after my mother-in-law's passing in 2022. After her home was sold in 2021, the cash proceeds from the sale were deposited in a trust checking account in my in-laws names. We reported the sale on my mother-in-law's taxes for 2021. My wife is the executor and had power of attorney. We used the funds in the trust account to pay for her assisted living care for about 18 months until her passing. There is about $30,000 left in the account which will be distributed evenly to 3 surviving sisters (my wife included). My mother-in-law lived in California. The sisters live in three different states - CA, WA and MT.
I don't believe the cash from the sale of the home were specifically designated as a gift or inheritance in her will. From what I have found thus far, it appears that there is no tax impact on the remaining funds and the sisters do not need to report the remaining cash as income, correct?
Does the remaining cash in the deceased's account automatically considered an inheritance or does it have to be explicitly stated in a will?
