Separate Assets

[athena53]

My philosophy is to make everything as easy as possible for my wife (but no easier) if I predecease her; hence everything is in a joint account.

In our marriage, nearly everything is in my name except the 2 cars and whatever DH has in his checking account, which isn't much. When we were talking to our lawyer about finances (DH is FINALLY signing a Will and Healthcare Directives on Friday), DH pointed out, quite reasonably, that if I were to get run over while pedaling my bicycle around, he'd be really low on funds till his next SS deposit came in. I moved $25K into a separate account at Fidelity that's Joint Tenant with Right of Survivor. That would tide him over till the trust/estate paperwork get underway and he's happy with that.

 

[Walt34]

With us everything is joint but like many we started with a negative net worth. I can see why many with a second marriage and assets would want to keep things more separate.

 

[523HRR]

Married happily for 19 years now. All accounts are separate; only the house is titled as joint ownership. Works very well. She pays some bills, I pay other bills. We each have our own reciprocal living trusts for estate planning.

 

[JPatrick]

MBMiner, this didn't sound right to me (bolded part). I googled, and the first three hits said the same thing:





On first reading, I thought that meant 50-50, half would be stepped up, half would not. But now I'm not sure of that wording 'contributed by the decedent', and 'the decedent’s share'? Does that mean, if JP's mother put 100% of the assets in the account, that 100% of the assets are stepped up? Or does it mean that if they were 50/50 owners of the account, that 50% of the assets are stepped up?

And if it was held jointly by three people, then 33.3% would be stepped up?

An example in those links would have helped - I find 'legaleze' to be too convoluted and imprecise.

Can anyone provide a link to clear this up?

EDIT: Updating my own post here -

Taxation of Stock After Date of Death | Finance - Zacks



So it seems, if JP can show that 100% of the assets were made by the decedent, then 100% should be stepped up. Make sense?

-ERD50

Yes it does make sense. In my case, 100% of the money was put in by her. I managed it for her, but didn't put in one dime. The 100% step up passed muster with the CPA and the IRS. This was in 1996 so rules could have changed.
The house was the also held jointly and did not step up. However, when all the capital improvements (new addition etc) factored, there were no taxable gains--funny how that worked out..

 

[Gill]

So it seems, if JP can show that 100% of the assets were made by the decedent, then 100% should be stepped up. Make sense?

-ERD50

No question about it. If 100% of the contribution to the joint property held between nonspouses came from the decedent there is a 100% stepup.
Bruce