Mom in Ass't Living now wants to sell her house

[jpjr]

Mom in Ass't Living nolonger wants responsiblity of home ownership

Mom has a modest home in which one of my sisters is currently living and who is paying a nominal amount to help support the costs of Mom's care in the facility. We had always contemplated spliting Mom's assets equally between the three of us, and figured we would let sister #1 use her portion of the inheritance to purchase the home from the estate - giving the 2/3 proceeds to the other two siblings. Sister #1 does not have the means to buy the house now and would rely upon other assets in the inheritance to buy us out. Out of the blue, Mom says she no longer wants the house in her name. Any thoughts on the best way to transfer ownership? Home is valued at 180k and is in Florida. Total estate including the house, some life ins and cash is appx 700k. We are reliant upon the 700k to pay for Mom's care.

Thanks in advance for your thoughts.

jpjr

 

[Sunset]

Sell the house on the open market and put it in Mom's account. It's her house.
Sister needs to move out.
Mom needs the money generated from the house and the 700K, so cannot simply give the house to the children

Mom could live another 10+ years , when she does die, then the leftover money can be divided.

 

[MichaelB]

Sell the house on the open market and put it in Mom's account. It's her house.
Sister needs to move out.
Mom needs the money generated from the house and the 700K, so cannot simply give the house to the children

Mom could live another 10+ years , when she does die, then the leftover money can be divided.

I agree.

 

[Walt34]

Sell the house on the open market and put it in Mom's account. It's her house.
Sister needs to move out.
Mom needs the money generated from the house and the 700K, so cannot simply give the house to the children

Mom could live another 10+ years , when she does die, then the leftover money can be divided.

Yup.

Emphasis on "It's her house." That means she can sell it when she needs to, not when it's convenient for someone else.

 

[jpjr]

Yes, not bad thoughts for selling, but one aspect not divulged is that Mom is 108. She wants her daughter to have the house, which is why she is currently living there. I'm looking into a Quit Claim, which is relatively easy in Florida. I would also require that we document the estate that life insurance payouts go first to me and sister # 2 to pay off the equity in the house and anything left after that would be settled in thirds.

 

[RunningBum]

[-]What does her age have to do with it? Do you have power of attorney? Has she been declared incompetent?[/-]
I was thrown off by the original title which sounded like they were going to do something against the mother's wishes to sell.

 

[CardsFan]

Unless Mom is suffering from mental illness, I agree with Sunset and MichaelB. It is her house. She may have reasons beyond the money.

OP, you say sister #1 is paying a "nominal amount" to live there. Does this amount even cover all fixed costs? Is it close to what the place could collect in rent on the open market?

If the answer to the questions above are no, mom may think sister #1 is a leech (and she might be right).

Of course, you or your the sibling could by the house and rent to sister #1 for a nominal amount until she inherits the money to buy. If this is not appealing to you, why should it be appealing to mom?

Just food for thought.

EDIT: cross posted with OP. Given the new information on age and desires, the above probably does not apply

 

[RetireeRobert]

Yes, not bad thoughts for selling, but one aspect not divulged is that Mom is 108. She wants her daughter to have the house, which is why she is currently living there. I'm looking into a Quit Claim, which is relatively easy in Florida. I would also require that we document the estate that life insurance payouts go first to me and sister # 2 to pay off the equity in the house and anything left after that would be settled in thirds.

Taking your word at face value---"Mom wants daughter to have the house".
If that is Mom's intent and desire, then all that's left is to facilitate the transfer. I do not think I would use quit claim deed, as that is (in my opinion) a less strong form of deed for a subsequent owner of real estate to have, and may present some hinderance upon any future resale of property. Your Mom can gift the house to daughter and transfer it via a warranty deed. Mom will be well under lifetime exclusion for any gift taxes, so no problem on that side of things.

I do not know what female life expectancy is at age 108, but I think everyone here would agree it is probably not more than a few years. The fact your Mom is letting people know she wants daughter to have to house tells me the only thing I would need to know---how do I facilitate what may be Mom's last wishes.

Gifting the house to daughter may not be "fair" to other kids "at this time", but things can be evened up later among the siblings.

 

[euro]

Has anyone asked mom how she envisions selling the house and at the same time wanting her daughter to "have it"? Maybe she is confused.

Also, when you say the property is worth $180k, are you referring to a recent formal appraisal, or is this the tax value assigned by the county? The former is what is needed for an arms-length transaction that will keep the government from clawing back money if mom becomes destitute. The tax value is meaningless, only the actual market value counts.

 

[KCGeezer]

Can the estate loan the necessary funds to allow her to buy the house? A simple promissory note at a the required interest rate might be an option. Especially if DM is 108.

 

[gauss]

From purely a tax perspective:

How long has Mom been living in Assisted Living as opposed to the house?

This will be a huge question in determining if she will qualify for the "exclusion" for sale of primary residence to the normal capital gain taxes that will be due.

If she has been in assisted living less than 3 years, see if you can get the house sold (or ownership transferred) ASAP. Otherwise a significant portion may go to Federal (and possibly State) capital gains taxes.

Otherwise it may make since to keep the house until after death to receive a stepped up basis in capital gains.

Note if she 'gifts' the house to someone before her death, the recipient will retain the original basis in the house -- a potentially less than optimal outcome.

You might want to get some professional advice on all this. I just tossed these issues out to motivate a discussion.


-gauss

 

[Aerides]

So Mom is 108 and wants her daughter to have the house. She just no longer wants it in her name. (OP never said Mom wants to sell the house). In that case, selling the house would go against Mom's wishes.

I'd consult with an estate attorney, and figure out how Mom wants the rest of her assets split up as well. Of course there's a slim chance she lives another 10 years, burns thru the rest of her assets, and your sister has the house and the other two of you get nothing? But that seems to be very slim odds.

 

[Scrapr]

If Mom wants daughter to have the house I might tell a little white lie & tell Mom Sister #1 bought the house from her. Assuming of course that Mom is not going to need the funds to sustain her in Assisted Living. If that were the case I would sell to Sister #1 with help from siblings or sell on open market as long as Sister #1 has a place to go.

This works if all siblings are on the same page. Also preserves the step up basis. Allows Sister #1 to stay in the familial home. Preserve goodwill among all the sibs

George Costanza: It's not a lie if you believe it

 

[MichaelB]

From purely a tax perspective:

How long has Mom been living in Assisted Living as opposed to the house?

This will be a huge question in determining if she will qualify for the "exclusion" for sale of primary residence to the normal capital gain taxes that will be due.

If she has been in assisted living less than 3 years, see if you can get the house sold (or ownership transferred) ASAP. Otherwise a significant portion may go to Federal (and possibly State) capital gains taxes.

Otherwise it may make since to keep the house until after death to receive a stepped up basis in capital gains.

Note if she 'gifts' the house to someone before her death, the recipient will retain the original basis in the house -- a potentially less than optimal outcome.

You might want to get some professional advice on all this. I just tossed these issues out to motivate a discussion.


-gauss

Excellent point. I would add, if she has been itemizing and deducting the expenses related to her care in an assisted living, the IRS would likely flag for review any return that included the $250K exemption.

 

[euro]

So Mom is 108 and wants her daughter to have the house. She just no longer wants it in her name. (OP never said Mom wants to sell the house). In that case, selling the house would go against Mom's wishes. .

Well, the title of the thread says "mom wants to sell the house....", so it's unclear what she really wants. That's why I suggested talking to her and finding out what she really has in mind. At 108 it's certainly possible that she occasionally manages to confuse herself.

 

[Aerides]

Well, the title of the thread says "mom wants to sell the house....", so it's unclear what she really wants. That's why I suggested talking to her and finding out what she really has in mind. At 108 it's certainly possible that she occasionally manages to confuse herself.

ah yeah the title heh, I was just reading the posts.

 

[RetiredHappy]

If mom wants the house to be given to her daughter / your sister, then that is to be done now. Your sister gets it free and clear, using quit claim to do so. You cannot assume that mom wants her assets divided equally between the 3 of you. Does she also have a will?

 

[jpjr]

I have changed the title, as it was not clear on her intentions. Mom has been in the ass't living for two years and is mentally very sharp. She has not been itemizing anything on her taxes related to her care. Sister #1 has been paying enough to cover the annual costs of staying in the home (8K) taxes and HO fees plus some additional funds. She is NOT paying full rental value which would be closer to 15k per annum. I am not worried about qubbling over a few grand and all the homes are similar and recent sales indicate 180k is viable. The three siblings will have no problems splitting everything in 1/3. We are co-executors but I'll do all the heavy lifting with the paperwork. All paperwork for POA, Advance life support, the Will are in order and other than the house, none of the assets will go through probate.

 

[RetiredHappy]

I have changed the title, as it was not clear on her intentions. Mom has been in the ass't living for two years and is mentally very sharp. She has not been itemizing anything on her taxes related to her care. Sister #1 has been paying enough to cover the annual costs of staying in the home (8K) taxes and HO fees plus some additional funds. She is NOT paying full rental value which would be closer to 15k per annum. I am not worried about qubbling over a few grand and all the homes are similar and recent sales indicate 180k is viable. The three siblings will have no problems splitting everything in 1/3. We are co-executors but I'll do all the heavy lifting with the paperwork. All paperwork for POA, Advance life support, the Will are in order and other than the house, none of the assets will go through probate.

Does your mother want to split it into 3 equal shares? You need to find out what are your mother's wishes. I know you want to split it 3 ways but your mother may not wish to do so, giving your sister the home outright.

 

[jpjr]

Yes, Mom expects us to split everything equally, and it is directed as such in the will.

 

[ivinsfan]

Yes, Mom expects us to split everything equally, and it is directed as such in the will.

Mom simply said that she no longer wanted the title in her name and that was all she said? Ask her a couple more questions...


At this point I'd consider Mom gifting the house to all 3 daughters , filing a gift return and when is Mom is gone sister uses the cash to buy out other two sisters. It would be easier to continue as you are now if Mom can be OK with that.

 

[ivinsfan]

Has anyone asked mom how she envisions selling the house and at the same time wanting her daughter to "have it"? Maybe she is confused.

Also, when you say the property is worth $180k, are you referring to a recent formal appraisal, or is this the tax value assigned by the county? The former is what is needed for an arms-length transaction that will keep the government from clawing back money if mom becomes destitute. The tax value is meaningless, only the actual market value counts.

She's 108 and has 700K don't think claw back is much of a worry...

 

[MC Rider]

What is the life expectancy of someone at 108 yo?
Even mentally sharp and in good shape for 108?
I would not be buying green bananas.


Hope the issue can be sorted without ill will between anyone involved.

 

[RetireeRobert]

If mom wants the house to be given to her daughter / your sister, then that is to be done now. Your sister gets it free and clear, using quit claim to do so.

I would still suggest transfer of house from Mom to daughter be done with Warranty deed and NOT with quitclaim deed. Quitclaim deed could come back to haunt daughter if/when she ever might decide to sell the house.

Here is what a Florida attorney firm says about warranty deed versus quitclaim deed:
https://www.ejj-law.com/quitclaim-deed-vs-warranty-deed-whats-the-difference/

 

[RetireeRobert]

What is the life expectancy of someone at 108 yo?
Even mentally sharp and in good shape for 108?
I would not be buying green bananas.

Life expectancy for females at age 108 is 1.44 years, or about 16 months.
here are the tables: https://www.health.ny.gov/health_care/medicaid/publications/docs/gis/20ma08_att_i.pdf