Sale of primary residence

[Kingofthepar3s]

I have a client who was advised by his attorney to put his children on the deed to his home with him having life use.  This is common here in NY State to prevent Medicaid from selling his home if he has to go in a nursing home in the future.  I have told my client if the home is sold while he is alive, they, the children, are part of the sale and have a tax responsibility.  Their attorney told them it is implied they will get FMV at the time of sale as FMV was "implied".

Has anybody had a similar case?

B. Tehan

[IRonMaN]

Unless there is a death involved, nobody is entitled to receive a step up in basis to FMV for any assets.

[jeffmcpa2010]

Might want to check and see if the attorney thought about having a Gift Tax return filed at the time of the gift as well........

[BobKamman]

Estate planners in New  York do a lot of things that aren't common in the rest of the country, although the desire to go on welfare seems to be national.  Medicaid doesn't sell anyone's home, they just have a lien on the proceeds if they have paid out benefits, and sometimes the lien is for more than their actual payments.  

Your client advised his attorney that he wanted the state to pay his final expenses so his children could enjoy his wealth.  Irrevocable trusts are used for that  instead, in many states.  There are tax consequences to those, also, although gift tax is not really an issue for 99% of people. It's like laws prohibiting cannabis or cohabitation, no one is going to enforce them.  

[qbteachmt]

Find out if the attorney did it right or wrong.

Listing everyone on the deed, either as Joint or as Tenants in Common = wrong.

As a Transfer on Death deed, filed and recorded = right.

Here:

https://nysba.org/new-york-now-allows-transfer-on-death-deeds-but-should-you-use-them/?srsltid=AfmBO...