MONEY TALK
Still no stimulus? It’s not just you
If your payment isn’t on the way or there’s another problem, you should reach out to the IRS. It’s not clear from your statement whether you actually reached a human being or just a recording. Please make sure you’re calling the right number because the stimulus payment number — (800) 919-9835 — is different from the general taxpayer hotline. You may have to be patient because hold times can be long.
Arizona mom doesn’t want a trust
Not having a living trust isn’t necessarily a crisis. Yes, a living trust would allow your mother’s estate to avoid probate, the court process that typically follows death. But probate in Arizona typically isn’t as long or expensive as it is in California.
What’s more important is having documents in place that allow you (or someone else) to handle her finances and make healthcare decisions should she become incapacitated. Without that, you might have to go to court, which could be a long and expensive process.
A living trust also would make it relatively easy for a trusted person to step in and handle her affairs if necessary. In the absence of a living trust, you should insist she fill out an advanced care directive that would allow a trusted person to make healthcare decisions for her. There are free versions for each state at PrepareForYourCare.org, along with instructions about how to make it valid.
She also needs to create a power of attorney for finances. Offer to hire an estate planning attorney to do this, since it’s a relatively simple form and not likely to be expensive. There are online forms and software that can do this if she absolutely refuses to consult an attorney.
An estate planning attorney might also be able to help you get off the deed. When she added you to the deed, your mom signed you up to pay capital gains taxes you wouldn’t owe otherwise. All the appreciation in the home that happened during her lifetime would be taxable, when it doesn’t need to be.
Let’s say she bought the home for $25,000 and it was worth $250,000 when she died. If you inherited the home and sold it for $250,000, you would owe no capital gains taxes.
If she gives you the home before her death — which she essentially did by adding you to the deed — you don’t get the valuable step-up in tax basis that keeps you from having to pay capital gains taxes on the appreciation that happened during her lifetime. Instead, you would owe capital gains taxes on the $225,000 appreciation.
Arizona has “transfer on death” deeds for real estate. These deeds would allow the house to avoid probate and come directly to you. That’s almost certainly a better solution.