QUESTION
Does the estate have to remain open until this land contract is paid off?
Asked on May 27th, 2013 on Estate Planning - California
More details to this question:
If a land contract goes to the seller's estate upon his death, how does this affect his heirs? Do they pay additional taxes as if the land contract was paid off in a lump sum or does their tax liability accrue monthly as the buyer's monthly payments come in to the estate?
9 ANSWERS
Probate Attorney serving Newport, OR
at
Minor, Bandonis & Haggerty P.C.
Update Your Profile
The contract can be assigned to the heirs; has it paid through a contract collection company that can divide up payments received.
Answered on May 28th, 2013 at 11:05 PM
Commercial Contracts Attorney serving Boise, ID
at
Peters Law, PLLC
Update Your Profile
Well, either the estate stays open until the contract is completed and the estate pays the taxes, or the property is distributed to the heirs and the heirs do it.
Answered on May 28th, 2013 at 12:10 AM
2 Awards
The estate should be closed, title transferred and each heir responsible for all costs and benefit from all equity. Your tax question is unclear, but generally if property is inherited from parent to child, there are no tax issues in either of your scenarios.
Answered on May 28th, 2013 at 12:02 AM
You should consult a probate attorney and CPA so that the documents can be reviewed and your questions answered.
Answered on May 27th, 2013 at 10:30 PM
Business Law Attorney serving Livonia, MI
at
Gerald A. Bagazinski
Update Your Profile
No. You could potentially assign the land contract to the parties. How was the property originally held?
Answered on May 27th, 2013 at 10:30 PM
3 Awards
Possibly or the beneficiaries may agree to establish a partnership or other entity to handle the payments.
Answered on May 27th, 2013 at 10:22 PM
Business Planning Attorney serving Livonia, MI
at
Frederick & Frederick Attorneys at Law
Update Your Profile
There might or might not be taxes due on the monthly payments. There would be transfer taxes owed when the land contract is paid off. Whether to keep the estate open or not depends on a lot of different factors. There are ways to close the estate and deal with this, but it should be handled by an attorney.
Answered on May 27th, 2013 at 10:20 PM
Probate Attorney serving St. Louis, MO
at
Edward L. Armstrong, P.C.
Update Your Profile
I assume you are speaking of a "long term land contract?" I couldn't tell you what it means without seeing it. I would guess if the owner's estate doesn't continue payments the owner would come in and repossess the property per the terms of the land contract.
Answered on May 27th, 2013 at 10:19 PM
Trusts Attorney serving Sacramento, CA
at
Law Office of Victor Waid
Update Your Profile
You are advised to obtain tax counsel such as a CPA.
Answered on May 27th, 2013 at 10:12 PM