Not sure if this is a GQ or an IMHO, so I’ll put it here and the mods can move it if needed. Also, I’m not asking for legal advice, just some ideas of what I might expect, or thoughts from anyone with similar experiences.
My dad passed away last month, and I’m going to be meeting with a lawyer to discuss his estate later this month (it’s not substantial, but there’s likely to be a decent amount of money involved). One thing I was wondering about ahead of time, though: my dad had two bank accounts, a savings and a money market, each with about the same amount in them (again, not huge but there’s a reasonable amount of money between them). Quite some time before he died, he added me as a second named accountholder (we had to go through having me sign a card and return it to the bank to do this).
After he passed away, I went to the bank to report his death and get set up online so I could use the account to pay Dad’s bills (for example, keep up the payment on his motorhome until we’re allowed to sell it). His name has now been taken off the account, so it’s solely in my name. When I spoke to the lawyer to set up the meeting later in the month, he told me that since I was on the account, this money is mine free and clear and won’t be part of the total when calculating his fees for doing the probate.
So my question is: what are the tax implications of this? Would it fall under inheritance tax? Between the two accounts they’re more than $10,000–isn’t that the threshold over which you have to pay taxes on a gift? Is it a gift?
I don’t plan to touch the money at all except to pay Dad’s bills with it until everything’s settled and I talk to the lawyer, but I also want to make sure I’m not in for a nasty surprise come tax time (and if am, to make sure to put aside enough money to cover it.)
Any thoughts? I’m in California, if it matters. My mother predeceased him, there are no other siblings, and I’m the only one named in the will. I’m both the sole heir and the executor, so there’s virtually no chance of anyone challenging the will. After I read the will to him, the lawyer told me that probate will be annoying and time consuming, but that it’s just a matter of waiting out the time it takes for the court wheels to churn.