What are the implications if my mother puts 200k in an account with my name?
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What are the implications if my mother puts 200k in an account with my name?
She claimed to have already paid taxes on it, I am not sure she did. But she said she wants the money in my name because her house is going into foreclosure and she has a large amount of debt and she doesn’t want the bank to take it. She also doesn’t want me to touch it. So what can happen if I keep it, give it back or just spend it myself? Also will I have to pay taxes on it? Can I find out if she already did pay taxes on it? Can this be fraud?
Asked on October 4, 2011 under Bankruptcy Law, Florida
Answers:
SJZ, Member, New York Bar / FreeAdvice Contributing Attorney
Answered 12 years ago | Contributor
This is almost certainly fraud:
1) To move assets to another person's name specifically to avoid creditors is a fraud on those creditors.
2) Your mother can't have it both ways--either it's your money, to do do with what you want; or it's her money in your account (which reinforces the fraud, and makes you an accomplice potentially).
3) If the money is yours, it does't matter whether she paid taxes on it--YOU still have to pay taxes on it, since this is income to you (subject to not paying on the annual gift exclusion amount, which is either $10k or $15k).
In short, there is almost no way that this is legal. You should ideally consult in detail with an attorney and follow his or her advice; failing that, return all the money to your mother with your apologies and let her deal with her debts on her own.
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