Deptford, NJ asked in Tax Law, Real Estate Law and Probate for New Jersey

Q: Will I eventually have to pay inheritance taxes on my own equity investments on home owned by my insolvent mother?

My sister and I together inherited half a summer home from our father. Our mother owns the other half. We want to buy out our mother and we have the funds to cover her half of the equity. But we can’t get a loan to cover the remaining mortgage, because the property is a duplex, not our primary home, and below flood level. And apparently the current mortgage is not eligible to be assumed while our mother is still alive. Title has not been changed since our father’s death, so the property is still in the name of our mother and deceased father.

Meanwhile, our mother is financially insolvent, so my sister and I are paying the mortgage, taxes, and etc. Additionally, we wish to make much needed improvements/repairs, but we are concerned that when we eventually inherit our mother’s half, we will have to pay inheritance taxes on our own capital expenditures.

We don't know if we neccessarily need a lawyer, but we need a solution and a licensed professional to implement that solution.

1 Lawyer Answer
Bruce Alexander Minnick
Bruce Alexander Minnick
  • Probate Lawyer
  • Tallahassee, FL

A: There are at least four different but related legal issues involved here. One of the answers includes practical advice which if followed could eliminate all other issues. Consider hiring a good lawyer to help you chart a path through this minefield.

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