Legal Question in Wills and Trusts in Massachusetts
I probably have more than one question but this is quite important. My father passed away March 11, 2013. He owned a 2 bedroom condo in a 55+community in Shelburne, Vermont. He purchased it for $72,000 approximately 8 years ago. His trust is a revocable living trust and deed of realty to trust states that he is grantor on the one part and my sister, my brother and myself and his revocable trust on the other part are conveying in trust to my sister, brother and myself the rights, title and interest. We have a prospective buyer for the property out of the blue as we have not advertised it. Will there be any kind of capital gains that we have to pay? My sister lives in Vermont, my brother in Minnesota and I live in Massachusetts. I really would appreciate your guidance because we need it. There are no liens or mortgage and asking approximately $155,000. Mony thanks. Boni
2 Answers from Attorneys
First of all, I am sorry that you lost your father.
You should have an attorney assist you with the probating of your father's estate, and with this real estate transaction. The attorney will need to read the actual terms of the trust, and will need to know more about your father's estate. Just because the revocable trust may not be part of your father's probate estate, there may be estate tax considerations that will need to be addressed as part of the sale.
To answer one aspect of your question, you should all receive a stepped-up basis, meaning that the property you inherit has a basis of the fair market value of the property at the time of death.
You may want to be asking this question to VT attorneys.
Mr. Vaughn-Martels response is exactly correct. There will be no capital gains tax so long as the value on the date of his death or six months thereafter is equal or greater to the net proceeds of the sale.
If your father has any other property, you should probate his estate. I assume he has a will and you should file it and complete the process.
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