Changing Distributions After Death – Part 1

Often when we have an estate administration matter, the will being probated is an old one.  In some cases the person never actually executed a will although he or she may have communicated to family members his/her wishes with regard to the distribution of assets.  In other cases the family members agree after death how they wish to split assets, which may be different than what the Last Will stated or what the intestacy laws provide when there is no Last Will.

While it may seem like no big deal if all the parties agree to the changes, there are potential tax ramifications to making changes after death.  That’s because the method of distribution set forth by the Last Will or by the intestacy law is basically set in stone once the person has died.  It can’t be changed, even by agreement between all interested parties.

Now, that’s not to say if I am to receive something from Mom’s estate, that I must accept it.  I can certainly choose to transfer it to someone else.  It’s just that this transfer comes from me and not because Mom instructed it that way.  In other words, it is potentially a gift from me to the person I transfer it to and that has certain gift tax implications.

In some cases I can accomplish the desired outcome without any negative tax implications and in some cases I can’t.  Next week I’ll explain what I mean.