What happens if my mom quit claims me her house? She's not ill or anything, but we recently lost my dad and she wants to transfer assets before she goes. Maybe not right now, but down the road.

*Will I owe the federal .gov monster a massive tax bill if she gives me her home while she is alive, or gone (located in AK, valued at $325k)? (Right NOW, it's not advantageous to transfer it to me since she gets a 150k property tax break for being a senior.)

*Will I have to pay capital gains if I sell the house? What if I sell it to one of my own kids?

*Do I have to pay taxes on money she leaves behind when she does pass?

*Will there be tax ramifications if she quit claims her rec property to me? (Also located in AK.)

Thanks for any help or info.

My recommendation is to spend a couple hundred $$ for an appointment with an attorney who has a detailed working knowledge of wills, trusts, and probate in AK. These questions are too important for you to make any decisions based on input from a public forum. Or, at least it seems so to me.

Yes!

In general, you do not pay capital gains on inheritances at time of death. That is, the tax basis for anything you sell AFTER inheriting it, is the value at death. She can give to you some amount (probably around $15k per year, but I don't know the current max) without you incurring any tax liability for the gift, however, the TAX BASE is also gifted. Over that amount is taxable income.

Until you get to many millions of dollars, there are no federal death taxes.

States vary.

Professional advise is always best.

Yep.. Do it wrong and you can really get screwed..

Recently put my property in my kids names, using a Lawyer. When I went down to pay the taxes for the year, I asked the assessor about the Homestead credit that I was getting, since I still have lifetime rights to live here. She looked and said since the lawyer did it the way that he did, the homestead tax credit will stay as long as Me or the Wife are still living there. Than alone will pay for the lawyer very quick. Almost in one year. We also had wills and other stuff done at the same time. miles

Yes, SEE A LAWYER! This sounds like something that is way to easy to screw up and following advice from someone that doesn't know what they are talking about won't cost them a dime but could cost you plenty.

The two of you need to meet with a lawyer that specializes in estate planning.

Rather than a quit claim, which is a suboptimal way to transfer real estate and sometimes reduces market value at resale, she can transfer the property to you in fee simple while retaining a life estate.

The lawyer can sort through all of your other questions, but she needs a will that conforms to Alaska law as well as the federal tax code.

Also needed for a basic estate planning package is a medical directive and power of attorney.

A basic package with consulting time probably will run $600 - $1,500. If there is more involved in the estate, the cost will increase. Preparation of the deed to effect the transfer will be a separate charge, but definitely is not a place to cut corners.

Money spent in planning ahead will be made back many times over on the back end for having things well organized and in a form that is something the local lawyers and judges are used to dealing with. It also helps reduces disputes after she is gone.

This is not a DIY project on the internet.

If you give your house to your kids prior to death, the tax value begins on the date of transfer. Likely the value of the house will continue to go up over the years, and had you waited until your death for the transfer the value of the house for tax purposes begin upon death (after it has gone up), hence they will pay less tax.

Spot on advice.

You guys are great. Thanks for the advice.

We are planning on see an attorney, just thought I'd throw it out to you guys first.

Made me realize this IS a big deal and needs to be dealt with correctly or I may pay for it later, down the road.

Suppose I need to make a list of questions for the attorney and that's why I began this thread as well. This is ALL new to me.

If we're going to spend some money on an attorney are there other things I should ask while I have his ear?

*Transferring rec property
*House transfer
*$$ transfer (found out the gift limit is $14k/year)
*Anything else I should be mindful of?

Thanks for everyone's help & responses.

2 years ago my father died. 2 years before that we went to a lawyer and had a quit claim done. everything except registering with county clerk.That way my dad retained ownership. After he died I took to county clerk and had it registerd. Property mine.No fuss.

Power of Attorney would be another thing to have done now..

That's good to know, 19rabbit. We looked a quit claiming our rec property to me. My mom is going to put me on her house too. Like someone else said, I can be on the house and she'll still get a property tax break while she resides there. Apparently one of her friends did this two years ago--lost her husband and put her daughter on everything--bank accounts, etc...

My mom has been diligent doing her homework about this stuff. My dad's death caught us off guard. Still going forward with an estate planner/attorney though.

Thanks for whoever suggested power of attorney, didn't think of that.

Just another vote for finding a good estate attorney, and paying him and her going rate for getting everything done properly. Expect a bill of a couple grand not a couple hundred, but it will be money well spent.

My folks had everything set up as a trust with an their attorney and it still took some time and some additional legal fees after they both passed to get everything settled, but it worked out smoothly.

Speaking of all this my wife and I are past due to set up a will and trust for our kids.

Definitely talk to counsel...and ask about a Transfer on Death Deed. Sometimes the name of the instrument varies with the state.

For your mom, a P of A or Durable P of A are things to consider as well as a medical directive.

Get a lawyer

Life will be a lot easier with a living trust, no probate, no taxes up to a certain amount.
Have her name you as an executor so that if she ever needs a hand with her finances you have authority to do so. Pay a lawyer today, make your life easier tomorrow.

The advice to seek competent legal counsel is spot on. Remember, the only thing worse than paying for an attorney is having not done so when you should have.

405wcf

Laws relating to transfer of real property are governed by the laws of the state in which the real property is located. Be careful of well intended advice from someone in another jurisdiction.

Federal law governs most of the tax issues: basis, recognition of gain etc.

There are also Medicare issues should a parent transfer to a child and also need long term care.

Few lawyers do this sort of work.

I would look for someone dealing with tax, real property, and elder law. May need more than one person.

It is much less expensive to plan around issues than to clean up a problem.

Their is little reason for mama to gift you money each year to avoid the estate tax when the credit is 5.4 million, unless mama has that kind of money. Now if you and mama are planning for a nursing home then you need to find a lawyer that does Elder law in Alaska if that where mama is going to stay.

Two or three other minor items:

Since your Dad has passed it would help to update beneficiary designations on any insurance policies.

If your Mom doesn't mind, she can put you on her checking or savings accounts as a joint owner. That way if she passes or becomes incapacitated you have instant, legal access to some of her money for doctor bills or final expenses without having to go through additional procedures to use the power of attorney, or executor paperwork.

Start a spiral notebook dedicated to the estate process, and use it for notes with dates to retain any and every bit of activity, meetings, phone calls , especially any monetary transactions in any direction. Also maintain lists of contacts and phone numbers, email addresses, etc.
This keeps everything in one place, and preserves info that you thought you would never forget, but you just might.

The monetary records are especially important if you have any siblings, so that all transactions are documented to support your actions if anything is challenged later. This helps insure fairness to all parties, especially you.

Not knowing exactly what her age is don't for get about the 5 year look back should she need to go into a home. Don't wait to long on this or the state could take it all to pay for the nursing home care.

Great advice nifty-two.

One of her trusted neighbor's we've known for 36+ years is going to help us find a lawyer and go through the process with us. He just did this when his mother passed last year.

Like me, he has one sibling that 'can't be trusted' with assets, so he's got some advice for us there too.

Mom is 68 and healthy, btw. Hopefully no nursing home in the future. Hoping she can remain in her house until the time comes.

Lawyer is the best advice given.