Have a question regarding the transfer of a real estate deed into my name. My parents have a small paid off home. Recently my dad has been put into an assisted living facility. Some days are better than others but he is still lucid and aware of whats going on. It appears my mom wants to move onto her sister's giant estate and live out her days there.

Anyway, for a host of reasons (and I will spare you the family drama) my parents are wanting to go ahead and sign their house over to me. In doing so is this defined as a "gift" and if so is there any tax consequences for anyone?

Is it easier if there is an exchange of money regardless of what that amount is vs the home's value?

Ultimately I think the goal is for me to fix the home up and sell it. Maybe I am making this out to be more complicated than it needs to be but I thought I would ask.

Thanks!!!

You need estate planning attorney, especially if there is any chance Medicaid will be involved in his care. You have to exhaust counted assets before he qualifies and if your mom is still in the house she can continue, but if she is not it may have to be liquidated to qualify. Also they can go back 5 years and claim counted assets, so if you transferred today and 4 years from now he dies they can basically come back to you and take any amount they paid out. There are some youtube videos about estate issues with advanced care and medicine but the just show that most have not dealt with this near early enough, and even a good lawyer is limited in what they can accomplish. Get good lawyer now and i hope there is still time in your case.

BoDog said:

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Have a question regarding the transfer of a real estate deed into my name. My parents have a small paid off home. Recently my dad has been put into an assisted living facility. Some days are better than others but he is still lucid and aware of whats going on. It appears my mom wants to move onto her sister's giant estate and live out her days there.

Anyway, for a host of reasons (and I will spare you the family drama) my parents are wanting to go ahead and sign their house over to me. In doing so is this defined as a "gift" and if so is there any tax consequences for anyone?

Is it easier if there is an exchange of money regardless of what that amount is vs the home's value?

Ultimately I think the goal is for me to fix the home up and sell it. Maybe I am making this out to be more complicated than it needs to be but I thought I would ask.

Thanks!!!

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Haven't checked in a couple of years, but my understanding is that if the house is gifted to just you and it is worth more than $28,000 yes, gift tax. If it's given to you and your wife, $56,000 would be the threshold.

There is/was some type of way to do the transfer. My father went through a phase 15 years ago where he decided to prepare for death or something (was a bit of a dark time for him) and transfered his home to me. I don't remember the specifics other than that it did involve an attorney and signing stuff. But I did not have to pay anything. There was no drama in our situation, so at the time I was just going along with his wishes and wasn't really involved in process. (dont want to sound too stupid or I titled about things.) Later after some research we put a Living Estate in place on it because of property taxes and the advantages of the LE when he did pass. Which is working out well now as we are finally approaching that point now.

Don't know about the medicaid angle mentioned, but want to say I saw something about it when his current terminal illness was found and I was trying to make sure things were in order.

Definitely a question for a legal expert with, probably, no simple answer.

I couple of things to consider:

1. They can gift it to you and they can write it off on their taxes as lifetime gift tax exclusion. This way, nobody has to pay a gift tax.

2. If you are gifted the house, your cost basis is what they bought it for. If they own it, and then one passes away, then the house would be stepped up to what it is worth (in TX). Also, if they own it, and you fix it up and sell within 5 years, you can sell it up to a $500k gain (as long as both are alive) with no gain tax.

#2 isn't complex unless you want exact understanding.

It does depend on all parties, but I would keep the house in their name, fix it up, and sell. There is likely no gains tax this way. Save the receipts on the remodel. Once sold, they can gift the money to you if you want. They would use the lifetime gift tax exclusion to avoid the gift tax. If you do both of these, you and they likely pay little to no tax. I am assuming the house isn't worth more than $600k when fixed and their estate when pass is less than $5mm.

not just nursing but also assisted living.
Again I think the Tax issues are down the list as to things you need to address. They are absolutely an issue but not as much as you fix/sell and Medicaid comes back 5 years later for the whole amount against you.

My wife had a client who brought her a listing on her mothers home with a similar issue. She filed a Lady Bird Deed that only transferred the ownership in the event of death. The mother was very near death so not exactly the same.

Thank you all for the information.

They are not nor plan to be on medicade. Dad is on medicare plus a supplemental private insurance. I assume this would satisfy that issue?

Health insurance and medicare do not pay for long term care needs. Assisted living is considered long term care in almost all categories. Medicare will only pay for skilled nursing care for 100 days (not sure on # of days 70-100). Based on OP, he doesn't need skilled nursing care, so the Assisted living comes out of income and assets.

Maybe some of the care can come out of the health insurance, but it won't be much.

Check to see if he has long term care insurance.

Harkrider 93 said:

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Health insurance and medicare do not pay for long term care needs. Assisted living is considered long term care in almost all categories. Medicare will only pay for skilled nursing care for 100 days (not sure on # of days 70-100). Based on OP, he doesn't need skilled nursing care, so the Assisted living comes out of income and assets.

Maybe some of the care can come out of the health insurance, but it won't be much.

Check to see if he has long term care insurance.

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No long term care insurance, unfortunately.

Dumb question but for those with zero or near zero assets are you typically just put in some kind of govt subsidized s--- hole?

There are a few nice places that accept Medicaid. There is one in Georgetown. Most are terrible.

They won't qualify for Medicaid if you sell the house. If they keep it to qualify for Medicaid, then the state can put a lien on the house.

Elder law attorney is really best for what you are exploring. Many estate/probate attorneys know elder law.