Should we sign over the deed to Mom's house before it goes through probate?

1 answer | Last updated: Sep 14, 2017
Brother & sister asked...

My mother past away leaving her house to my brother and me, my brother dose not want his shar and wants to sign it over to me. We have not gone through probate yet because we are getting conflicting info from our laywers. His is saying don't sign the deed over because it hasn't gone through probate yet and he will have to pay a gift tax, mime says he can sign it now before it goes through probate and if there is a gift tax I would have to pay it. What do we do?

Expert Answers

I think it doesn't matter which way the gift is made. Whether your brother signs the deed before probate or after it, he is making a gift to you. If the gift is worth over $13,000, a federal gift tax return is supposed to be filed. However, the current federal gift tax exemption is $5 million dollars. No tax is due if the total lifetime value of gifts made by the giver is less than $5 million. It seems extremely unlikely that his half-share in the house is worth over $5 million.

If you do decide to file a gift tax return, it seems fair to me that you, not your brother, pay to have ti prepared. Though he would have to sign it and file it.

Only a few states impose gifts taxes. I do not know if the house is in a state that does impose gift taxes. Even if it is, these taxes are likely to be minor at worst. If state gift taxes are assessed, it seems right that you, not your brother, pay them.