distribution of account
if there is a joint account (wros) (non-ira) and one person now needs care in a group home, is it possible to split the account 50/50 between the two parties with no legal ramifications? or tax consequenses? The healthy person has been caregiving many years to the one now needing the group home.
Permalink Submitted by Peter Lingane on Thu, 2011-01-27 19:04
If the account is really community property even though titled JT, it should be possible to draft an agreement to split the account equally without income tax consequences. If the account is separate property, it should be possible to divide the account but an equal division would be considered a gift from the party who contributed the funds or more of the funds to the party who did not contribute or who contributed less. That means a gift tax return if the parties are not married but probably no need to write a check to the U.S. Treasury. Splitting the account is lawyer work, especially if a special needs trust is indicated.
Permalink Submitted by Meggy Brookson on Fri, 2011-02-04 18:56
Are you both in agreement to split the funds equally? This is paperwork that you would have to go through with a lawyer to make sure that both parties are in agreement to the situation and that it is legal without any repercussions. Were you the one contributing mostly to this account, or was it of nearly equal contributions? If you can give a little more information about your situation I could be of more help. Thanks and good luck!