What is considered to be a gift by an estate?
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What is considered to be a gift by an estate?
My father is allowing 1 sibling out of 7 to farm 600 acre for less than fair market value of rent. Low ball rent of $150 should be used, however, he is only recieving $24,000 with benefits. I contend that the lone sibling is recieving an estate gift. My father should have over $90,000 year in rent income that should be banked and be part of his estate, instead the sibling that is farming has increased his own estate tremendously. Should these amounts come off their share when it’s time to probate the estate?
Asked on November 29, 2011 under Estate Planning, Michigan
Answers:
FreeAdvice Contributing Attorney / FreeAdvice Contributing Attorney
Answered 12 years ago | Contributor
If you father owns free and clear the land that he is allowing one sibling to farm at a good rental, then that is your father's decision to do what he wants to do concerning the rental with your other sibling under either an oral or written lease agreement.
When your father passes, any below market rate rental that the one sibling has received will not come out of his or her share of the estate assuming a gift to this sibling is made by a Will or trust.
Assuming there is a Will or trust of your father, its terms will control who gets what gift unless the written document mentions some offset deduction as to the sibling who seems to have a favorable rental arrangement.
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