shirazallen
New Member
Hello,
I live in CT and have a real thinker here for you legal buffs. My case is very complex with some "gray" areas that would have best been advised by a tenacious team of estate and tax lawyers with estate/tax accountants and a leprechaun for good luck. I hoped to get some thoughts here before hiring yet another lawyer (which we haven't had much luck with).
I will break this down in sections so I don't overwhelm anyone and so I can compare your advice with what was given:
My father passed away intestate in late 2002 without a spouse and with three heirs. A bulk of the assets were owned by two LLC's organized the exact same in 1995; 55% profit/loss sharing for Dad and 15% each to three Irrevocable Gifting Trusts (one for each child). His intentions were to gift everything to his heirs, minimizing tax liability.
Dad didn't have many of the assets in his own name; some bank accounts, stock, an IRA, and a small vacant lot, whereas LLC 1 owned a large bank account, a CD, three active rentals (one residential [two-family] and two commercial), and two residential pieces (one of which is my primary residence, the other; our Mother's). LLC 2 owns two "inactive", vacant real estate lots (both with partners [one of which can't be reached]) that have been collecting backtaxes a couple years prior and ever since.
This is what seems to be the main issue: On Dad's last filed tax return in 2001, he somehow claimed 100% capital interest in the LLC's and 0% for the trusts, whereas the prior year he only claimed 55%. The Trustee claimed that the Trusts were not funded, but we had no way of knowing.
For years after he died we were advised that he gifted us his assets because a clause in the LLC's Operating Agreement stated that "an owner/member may gift their ownership until the day before death"; though we had no documents or returns stating this, only a letter from his accountant saying "I know your intentions are to gift your assets to your children...". You should also know that in 2005 our "new" attorney advised we pay a large sum to the IRS and State to "stop any interest", which we did, but we did not file a return at that time. So, as advised by our lawyer, we dug up and organized tons of paperwork for a 709 that would have gifted his "55%" ownership of the LLC's to us (the 55% value also would have excluded the estate from any estate taxes). Our accountant didn't understand why only 55% was to be gifted because of his ownership on final return; she ultimately never drafted the returns and was discharged by us. That was in 2009.
Ok, section one complete. Before I go on, I'm curious what questions you have and/or how you would have proceeded so I can compare to the advice given?
I live in CT and have a real thinker here for you legal buffs. My case is very complex with some "gray" areas that would have best been advised by a tenacious team of estate and tax lawyers with estate/tax accountants and a leprechaun for good luck. I hoped to get some thoughts here before hiring yet another lawyer (which we haven't had much luck with).
I will break this down in sections so I don't overwhelm anyone and so I can compare your advice with what was given:
My father passed away intestate in late 2002 without a spouse and with three heirs. A bulk of the assets were owned by two LLC's organized the exact same in 1995; 55% profit/loss sharing for Dad and 15% each to three Irrevocable Gifting Trusts (one for each child). His intentions were to gift everything to his heirs, minimizing tax liability.
Dad didn't have many of the assets in his own name; some bank accounts, stock, an IRA, and a small vacant lot, whereas LLC 1 owned a large bank account, a CD, three active rentals (one residential [two-family] and two commercial), and two residential pieces (one of which is my primary residence, the other; our Mother's). LLC 2 owns two "inactive", vacant real estate lots (both with partners [one of which can't be reached]) that have been collecting backtaxes a couple years prior and ever since.
This is what seems to be the main issue: On Dad's last filed tax return in 2001, he somehow claimed 100% capital interest in the LLC's and 0% for the trusts, whereas the prior year he only claimed 55%. The Trustee claimed that the Trusts were not funded, but we had no way of knowing.
For years after he died we were advised that he gifted us his assets because a clause in the LLC's Operating Agreement stated that "an owner/member may gift their ownership until the day before death"; though we had no documents or returns stating this, only a letter from his accountant saying "I know your intentions are to gift your assets to your children...". You should also know that in 2005 our "new" attorney advised we pay a large sum to the IRS and State to "stop any interest", which we did, but we did not file a return at that time. So, as advised by our lawyer, we dug up and organized tons of paperwork for a 709 that would have gifted his "55%" ownership of the LLC's to us (the 55% value also would have excluded the estate from any estate taxes). Our accountant didn't understand why only 55% was to be gifted because of his ownership on final return; she ultimately never drafted the returns and was discharged by us. That was in 2009.
Ok, section one complete. Before I go on, I'm curious what questions you have and/or how you would have proceeded so I can compare to the advice given?
