# Death of Parents - taxation issues



## baker3232 (Oct 7, 2011)

Please clarify the issues for me. On the death of the sole surviving parent, I understand that all investments are considered sold as of that time and taxed as income in the final year. Does the same apply to savings accounts? What about this scenario? My mother has an investment account on which, when my father passed away, my name was put on the account so that the account was in both our names. Is this also deemed sold as part of her estate, or does my name on it prevent this from happening. Thanks for any help you may pass along.


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## praire_guy (Sep 8, 2011)

Bank accounts held jointly between adult children and elderly parents are considered to be for convenience and not as a gift I.e automatic transfer by rights of survivorship, unless it is documented that the bank account is intended as an immediate gift upon death. 

It used to be joint accounts did not form part of the estate but the supreme court ruled otherwise a few years ago.


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## OhGreatGuru (May 24, 2009)

Please cite the details of this Supreme court "ruling". The cases I have found references for generally involved a dispute with other beneficiaries as to whether the joint account should be considerd part of the estate for distribution purposes. At issue was whether or not it was the deceased's intent that the joint account bypass the estate. In least one case I found on the net the plaintiffs tried to make that argument, but the judge rejected it.

I have not heard of a general court ruling that joint accounts must pass though the estate.


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## praire_guy (Sep 8, 2011)

http://www.self-counsel.com/news/la...ng-tip-watch-out-for-joint-bank-accounts.html



http://estatelaw.hullandhull.com/articles/topics/joint-accounts-1/

Just went through all this a couple of years ago. Was told by my lawyer presumption of trust applies to joint bank accounts. 

Real estate is still right of survivorship


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## yyzvoyageur (Apr 10, 2009)

praire_guy said:


> http://www.self-counsel.com/news/la...ng-tip-watch-out-for-joint-bank-accounts.html


That's interesting, but if there's only one beneficiary (say, an only child) and that beneficiary is named as the joint account holder with the deceased parent, I can't see that causing any trouble. It should be a simple matter of the surviving account holder going to the bank, showing a death certificate for the other, and making changes to the account. It's more when other beneficiaries (or people who assume they should be beneficiaries) are involved that trouble arises. My opinion through experience only. I'm no expert.


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## Karen (Jul 24, 2010)

In any case, who the beneficiary is would only be an issue if it was contested, and the OP hasn't suggested that that's likely to happen here. Getting back to his original question, my late husband was an only child and had joint bank accounts with his father, although the funds were originally Dad's; when his father died, he provided a death certificate to the bank, and the bank simply removed Dad's name from the account. It did not form part of the estate. This happened in 2008, so unless the laws have changed since then, the account that the OP holds jointly with his mother would pass to him and would not form part of his mother's estate.


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## baker3232 (Oct 7, 2011)

Thanks for the answers so far, but what about a simple savings account. I realize that it will go to the beneficiaries listed in the will, my brothers and myself, but is this money taxed as income iin the year of her death?


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## Westerly (Dec 26, 2010)

There is no death or inheritance tax per se. Funds in savings accounts are not taxed as income.


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## yyzvoyageur (Apr 10, 2009)

baker3232 said:


> Thanks for the answers so far, but what about a simple savings account. I realize that it will go to the beneficiaries listed in the will, my brothers and myself, but is this money taxed as income iin the year of her death?


No. Tax would have to be paid on any accumulated interest earned in the account, but the capital itself is not going to be taxed.


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## praire_guy (Sep 8, 2011)

Karen is correct, so long as there is one beneficiary , or it is not contested, it is a non issue. 

Some banks will just let you close the account and so e will require the death certificate.


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