Life Time Estate

[Terry D EA]

I don't have time to look this up and don't deal with them too frequently and this is for me personally. My mother has opted to deed her home to my sister and I, and wants, and will get life time rights. Her health is excellent but she is 80 and knows what she is facing with her own mother and medicaid who will be 100 years young in September. Here is my question, what is the basis for my sister and I at the time of death? I know I should know this but I am soliciting your help.

Thanks,

[TAXBILLY]

http://library.findlaw.com/1999/Sep/1/130818.html

taxbilly

[jainen]

>>I don't have time to look this up<<

In my opinion, a quickie answer pulled off the Internet will not meet the needs of your mother or her heirs. I'm not sure what you mean by "life time rights" but such non-standard terminology could cause you a whole lot of grief. In my opinion, you should get some genuine estate planning advice.

Medicaid and income tax have different rules that sometimes conflict. You assume your mother might need Medicaid, presumably for a nursing home. But when she moves out of her home, you may lose the basis adjustment. Now, those income tax rules are currently scheduled for a dramatic change at the end of this year, but there is a lot of speculation that Congress may make further changes. Your timing might well be more important than the actual decision.

You need to make some serious assessments about potential capital gains tax and your mother's likelihood of needing Medicaid within three years, as well as many other factors. You may be able to accomplish your mother's goals by, for example, setting up a trust or buying the property now. You say you don't have time for this, but what could be more important? I don't mean to be morbid, but for all you know you might have a lot less time than you even think.

[Terry D EA]

Jainen,

Thank you for your reply. I do agree with your assessment of the situation and we are seeking competent legal estate planning. With that said, I am interested in the information you have regarding the changes in the income tax rules coming at the end of the year. Can you direct me to that information? I would certainly appreciate it. The life time rights I was refering to is a life estate. My mother is very healthy and is on no medications. I wouldn't think that a nursing home or need for assistance from medicaid is in the near future. Although, one never really knows. You are not being morbid at all with your suggestions. When my father died, we were thrown a curve ball as it was totally unexpected. After going thru everything with only a will and no other planning, I vowed it wouldn't happen again. Thanks for your help