Which route incurs the least taxes when parents pass a house to their children?

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Which route incurs the least taxes when parents pass a house to their children?

My parents are planning to leave their house to me and my brother. They read

that the taxes incurred are astronomical. What options are available to my

parents and to me and my brother that would incur the least amount of taxes?

Asked on April 15, 2018 under Real Estate Law, New York

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 3 years ago | Contributor

Under federal law and the recently passed Trump tax plan, if they simply will the home (and any other assets they have) to you and your brother, there would only be taxes if the total value of the estate (of everything the two you are getting, including the house) exceeds $11 million. Your state has a lower threshhold, but still presently only imposes taxes on estates over $5 million in value. Unless you and your brother would be inheriting many millions of dollars, the estate tax is not an issue; and if you are inheriting enough to possibly pay estate tax, your family should hire a trusts and estate attorney to help you with estate planning--for multi-million dollar estates, hiring an expert to plan it out in advance is well worth it. But if you are talking about a home worth several hundred thousand dollars, or even between $1mm and $2mm, and maybe several tens or hundreds of thousands of dollars of other assets (e.g. money, jewelry, investments, etc.), there is no need to worry about estate taxes unless the tax laws radically change, and they can just will you the property and other assets.


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