Legal Question in Wills and Trusts in Georgia

Your post makes no sense at all. What are you asking?

Your question makes no sense to me. A life estate is a form of ownership of property while people are alive. Think of owning a piece of property as a bundle of 100 sticks. With a life estate, if you have 100 sticks, you give 99 of them away to some other person or persons called the remainderman/remaindermen. The person who keeps 1 stick is called the life tenant.

When the life tenant dies, the property automatically passes to the surviving remaindermen. If the children are the remaindermen, they get what is called a "stepped up" basis. I'm not a tax professional or tax attorney, so the children should consult with a CPA to help them.

When the remaindermen are first given their remainder interest in the life estate, at that point, both the life estate and remainder interest must be valued. I don't know what the property is worth now, what it was worth at the time the life estate was created or what it will be worth when the life tenant dies. However, values are assigned to the life tenant's and remaindermens' shares. At death, the value of the property will again be reviewed. The remaindermen, if they sell the property, would possibly have to pay a capital gains tax on the difference between the value of the property at death - the value of what they got when the life estate was created. The life tenant, again depending on the value of the property, might incur a gift tax, but if no other gifts were made, then this would fall within the $1 million lifetime exemption (the level might have been changed by the Tax Act of December 2010).

Georgia has no inheritance tax. The state estate tax is tied to the federal estate tax. The Act of December 2010 provided that estates under $5 million ($10 million for married couples) will not incur estate tax so I don't think the children would have to worry about these taxes unless there was a significant estate.

Since I don't know all of the facts, posting here is not a substitute for competent review by a probate attorney and maybe a tax attorney or CPA. I suggest that you go to the county/state where the land is located and start with a probate attorney there.