[Fastskiguy]

Originally Posted by retiredguy123

The key is the cost basis of the stock. With a gift, the recipient of the stock must keep the same cost basis that the giver had. So, if the giver had a cost basis of $10K, the recipient must live with that basis. But, with an inheritance, the cost basis is "stepped up" to the stock value at the time of death (although, in some cases, I think the beneficiary may be able to opt to use the stock value 6 months after death instead). Once the gift or inheritance takes place, the cost basis is set and the owner of the stock must pay a capital gains based on the sale price minus the cost basis. It doesn't make any difference when the giver dies after he made the gift.

That makes perfect sense. It seems like when it comes to appreciated assets, gifts and inheritance are not the same things! Thanks again

Joe

[Boomer]

Originally Posted by Decadeofdave

From another angle, our friends kids want to know their inheritance amount so they can figure out how long they won't have to work. An inheritance is a blessing, not a right, just my humble opinion.

Well, that sure sounds to me like a downright ghoulish retirement plan. . .If those were my heirs, I might suddenly start being quietly and extra generously more charitable during my lifetime or set up a trust giving a lot or all of it to charity. SURPRISE!

Boomer

[ElDiabloJoe]

This thread has been very educational. I will share it with the neighbor and hopefully it will help her form the right questions to ask her professional advisors. The insights gained by your contributions are much appreciated, especially those from:

FastSkiGuy, OrangeBlossomBaby, CoachKandSportsGuy, Boomer, TopSpinMo, Slainte, Retired123, ManAboutTown. I'm especially appreciative of post #'s 22 49, 53, and 54.

I was aware of the irrevocable trust re: medicaid eligibility issues as it was done with my wife'a parents. I was also aware of the Florida probate absent a trust issues, but this neighbor is "up north." I am familiar with the step up in cost basis and it's relationship to capital gains, but I did not think about it in this scenario, so thank you very much for that insight!

[MplsPete]

When I read the original post, I was shocked how closely this parallels an old story, and shocked that no one else has raised the matter. I guess those useless liberal arts courses finally came in handy. King Lear by Shakespeare: Old king decides to abdicate and divide his kingdom up to his 3 daughters. One begs him not to, the other two are on board. So he spurns the one who disagreed, and gives it to the two who agreed with him. Guess what happens once the money was gone?

I don't know anything about all the legal issues raised by others, but I say: Read King Lear! Family can screw you just as much as strangers.

[Carla B]

And, a fitting denouement to this thread.