Need help with probate / estate situation

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dropdx
Posts: 115
Joined: Thu Jun 06, 2019 9:01 pm

Need help with probate / estate situation

Post by dropdx »

My mom unexpectedly passed away last year.

She owned a home in Colorado and a second home in Florida.

Her home in Colorado is valued at around $420K, and it was originally purchased for around $200K. A few years ago she used the equity in the Colorado home to purchase the Florida home.

Because she has property in two different states, we need to do probate in both states. The Florida probate attorney told us that we can't start probate there until the probate in Colorado was finished. The probate attorney in Colorado told us that probate there cannot be finished until all assets and debt were out of the estate, which includes the house and the home equity loan. After a discussion with both attorneys it was decided that the easiest way to finish probate in Colorado and get started on Florida was to use money from the estate bank accounts and from us siblings to pay off both the Colorado mortgage and home equity loan that was used for the Florida house.

So, this is what we did. And now probate in Colorado is finished, and Florida has started.

To make everything simple, we just put the deed for the Colorado house in my sister's name, who is also the executor. We actually just listed the Colorado house last week, and we already have an offer. But now we are wondering about taxes.

Since the Colorado house is out of the estate, did we lose tax benefits? What taxes will my sister need to pay when the house is sold? What value of the house is used? Does she still receive the FMV of the house when my mom died? How is that figured?

And there are 4 of us total, so then she still needs to split that money between all of us. How will that work?

Any guidance is very appreciated. My head hurts just thinking about this, and I don't know what to do.
Last edited by dropdx on Wed May 13, 2020 7:23 pm, edited 1 time in total.
BillWalters
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Re: Need help with tricky probate / estate situation

Post by BillWalters »

Despite not one but two attorneys being involved the house was deeded to sister? How is that even possible?
Topic Author
dropdx
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Joined: Thu Jun 06, 2019 9:01 pm

Re: Need help with tricky probate / estate situation

Post by dropdx »

BillWalters wrote: Wed May 13, 2020 7:11 pm Despite not one but two attorneys being involved the house was deeded to sister? How is that even possible?
Could you expand a bit? I'm not following what you're saying or questioning.

We are all close, so I'm not worried that only her name is on the deed. I have zero doubt that my sister will split the monies equally. I'm more concerned about taxes she will need to pay when the house sales, and then the best way for her to get the money to us.

Unless you're hinting at this for a different reason?
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galawdawg
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Re: Need help with tricky probate / estate situation

Post by galawdawg »

dropdx wrote: Wed May 13, 2020 6:09 pm My mom unexpectedly passed away last year.

She owned a home in Colorado and a second home in Florida.

Her home in Colorado is valued at around $420K, and it was originally purchased for around $200K. A few years ago she used the equity in the Colorado home to purchase the Florida home.

Because she has property in two different states, we need to do probate in both states. The Florida probate attorney told us that we can't start probate there until the probate in Colorado was finished. The probate attorney in Colorado told us that probate there cannot be finished until all assets and debt were out of the estate, which includes the house and the home equity loan. After a discussion with both attorneys it was decided that the easiest way to finish probate in Colorado and get started on Florida was to use money from the estate bank accounts and from us siblings to pay off both the Colorado mortgage and home equity loan that was used for the Florida house.

So, this is what we did. And now probate in Colorado is finished, and Florida has started.

To make everything simple, we just put the deed for the Colorado house in my sister's name, who is also the executor. We actually just listed the Colorado house last week, and we already have an offer. But now we are wondering about taxes.

Since the Colorado house is out of the estate, did we lose tax benefits? What taxes will my sister need to pay when the house is sold? What value of the house is used? Does she still receive the FMV of the house when my mom died? How is that figured?

And there are 4 of us total, so then she still needs to split that money between all of us. How will that work?

Any guidance is very appreciated. My head hurts just thinking about this, and I don't know what to do.
Those are all questions that should be/should have been posed to the attorney in Colorado handling the estate. The way you describe the situation being handled seems very odd to me, but I am not licensed to practice in Colorado and have little experience with handling probate matters. There may have been very good legal reasons to have proceeded in that fashion. Good luck.
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celia
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Re: Need help with probate / estate situation

Post by celia »

Your attorneys know the situation better than we do with this simple outline.

What do they say when you ask them?

And have you even asked the executor, who should be on top of this?
Gill
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Re: Need help with probate / estate situation

Post by Gill »

The house received a new basis and that will be the basis when she sells it. This is not lost because it is no longer in the estate. Usually, if sold within a reasonable time the basis will be the sales price. Should be no problem splitting up the proceeds.
Gill
Last edited by Gill on Wed May 13, 2020 8:24 pm, edited 1 time in total.
Cost basis is redundant. One has a basis in an investment | One advises and gives advice | One should follow the principle of investing one's principal
bsteiner
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Re: Need help with probate / estate situation

Post by bsteiner »

dropdx wrote: Wed May 13, 2020 6:09 pm My mom unexpectedly passed away last year.

She owned a home in Colorado and a second home in Florida.

Her home in Colorado is valued at around $420K, and it was originally purchased for around $200K. A few years ago she used the equity in the Colorado home to purchase the Florida home.

Because she has property in two different states, we need to do probate in both states. The Florida probate attorney told us that we can't start probate there until the probate in Colorado was finished. The probate attorney in Colorado told us that probate there cannot be finished until all assets and debt were out of the estate, which includes the house and the home equity loan. ...
There's probably a miscommunication here.

You can do ancillary probate in Florida once the Will has been admitted to probate in Colorado. You don't have to wait until the estate administration is otherwise completed.

You would file a petition for ancillary administration in Florida together with exemplified copies of the Will and the Colorado probate papers. Exemplified essentially means that there are a couple of extra seals on them. The clerks at the probate court in Colorado will know exactly what to give you -- it's not unusual for someone in one state to own property in another state.

I don't understand the rest of what you posted.
muddlehead
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Re: Need help with probate / estate situation

Post by muddlehead »

Seems clear cut and simple to me.

Sell each property. (I'm assuming we're under any "death tax" or "estate tax" limits. If so, no taxes due from the 4 recipients).

Divide the sale proceeds by four.

That's what this random internet guy says.
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