Legal Question in Wills and Trusts in Florida

Re: Co-ownership of assets before death

Mother will own the balance of the accounts when sister dies. In Florida this is not a probate asset and passes directly outside of the probate process. If this was sister's intent, then no Will is needed to accomplish this transfer. If mother does not or cannot withdraw funds for her own benefit then there is no completed gift and there is no federal gift tax imposed. As this is a joint interest, part or all of the accounts might be included in the sister's gross estate upon her death for the purpose of determining any federal estate tax due. If there is federal estate tax due then mother might be required to contribute the portion of the tax that is directly attributable to these accounts being included in the gross estate. As long as sister pays all income tax on these funds then there should not be a current income tax problem. However, this answer might change if mother receives income from these funds or asserts ownership over any portion of these funds by personal use. Because of the nature of the accounts and amount involved, I would strongly recommend that an attorney be consulted to consider placing these assets in trust with mother being the trust beneficiary upon the death of sister. Upon the death of sister any family member might contest the transfers to mother under guise of undue influence. Here again the formalities of a trust would be very helpful in defeating such after the fact claims and limiting or eliminating the costs of such litigation.