Children expected to inherit mom’s house, but nephew cuts in

The information in this column is intended to provide a general understanding of the law, not as legal advice. Readers with legal problems, including those whose questions are addressed here, should consult attorneys for advice on their particular circumstances.

Q: My mother’s nephew moved in with her and took over her life. She had a will leaving all her possessions to me and her other children, but he had her sign a transfer on death deed for her house two days before she died. He and his girlfriend were given the house in that deed. He showed up at her funeral in a new truck so we know he

spent her money before she was even buried. Can we take her will to the courthouse and get the house?

A: You can’t literally go to the courthouse with you mother’s will and hope to get someone at the court to help you out. Instead, you and your siblings need to hire an attorney with the intent and hope of accomplishing a number of things.

The executor named in your mother’s will needs to probate the will. That way, there will be an executor appointed by the court with the power to handle estate-related matters.

Once that is done, the executor along with the children will probably then need to file a lawsuit seeking to have the transfer on death deed declared invalid. The executor should also attempt to get some of your mother’s money back from the nephew. That will almost certainly be extremely difficult because much of the money might already have been spent.

The nephew will probably contend that your mother acted voluntarily and wanted him and his girlfriend to have the home.

The bottom line is that you are looking at an expensive and difficult battle, but one that can possibly be won. You need to decide whether there’s enough property at stake to justify the expense, knowing there’s a good chance you will get nothing.

Q: My will gives one of my daughters a small piece of rental property that I own. I would like to give her the property now. If I do this, will I have to pay any taxes? Also, do I have to notify my insurance about the changes?

A: There’s almost no chance you’ll owe gift taxes if you give the property to your daughter. Gift taxes don’t kick in until you’ve given away more than $11,180,000 worth of property.

If you think your death will occur sooner than later, and if the property has a cost basis which is somewhat lower than the property’s fair market value, then it would be better to keep the property and not give it away. The reason is that the cost basis will be increased to fair market value upon your death. This could save your daughter capital gains taxes when she sells the property, and it would also increase her depreciation expense.

Yes, she would need to obtain her own insurance should she become the new owner.

Talk to an accountant or attorney before you do anything.