Does paying land’s taxes give one heir ownership?
Q: My father and I have been paying taxes on a piece of land in Louisiana for 40 years. He paid for about 25 years, and I’ve paid the past 15. When my husband and I checked on the deed to the property, we discovered that the land actually belongs to the “heirs” ofmy mother’s father and not to any one person in particular. How do I go about actually claiming ownership of this property?
A: Louisiana has what is called “acquisitive prescription,” also known as “adverse possession” or “squatter’s rights” in other states.
It is unclear from your question whether you have satisfied all of the requirements to make a claim to ownership. You should meet with a real estate attorney in Louisiana to explore your options.
Q: I have a friend who is going through a divorce. He has a large brokerage account that he had when they got married. It would have been entirely his separate property at that point. But interest and dividends earned on that account is community property, correct? Because he did not sweep the interest but left it in the account, does that commingle the community and separate property so that his
account is now all community property?
A: You are correct that when he got married, the account was entirely his separate property.
As the years passed, the account became part community and part separate, but not entirely community property. At the time of his divorce, the account is presumed to be entirely commu
nity property, but he has the opportunity to trace all the interest and dividends to determine how much of the account is actually community property.
An accountant, or preferably a forensic accountant, can handle this type of project.
Several decades ago, this was more difficult because monthly statements were missing, often for years. But now it should be possible to gather every statement for the entirety of the marriage, making the tracing much
easier.
Q: I want to givemy children their inheritances before I die. Is it possible to do this and still avoid a gift tax scenario?
A: This year, the 40 percent gift tax only applies once you have given away $11.58 million. Plus, you can give each of them $15,000 in cash or property every year without it counting toward the $11.58 million.
If you are planning to give them less than the limit, you will
owe no gift tax. You might be required to file a gift tax return, but you will not owe any gift tax.
Don’t forget to keep enough funds for yourself. Also, if you have property with a low cost basis, it would probably be better for them to receive that property when you die, as the property will get a stepped-up cost basis upon your death.
And don’t overlook the possibility that the $11.58 million exemption could drop significantly if the Democrats regain power in
Washington, D.C.
The information in this column is intended to provide a general understanding of the law, not legal advice. Readers with legal problems should consult attorneys for advice on their particular circumstances.
Ronald Lipman of the Houston law firm Lipman & Associates is board-certified in estate planning and probate law by the Texas Board of Legal Specialization. stateyourcase@lipmanpc.com.