What is the easiest way to gift a property?

Question

My mother has a condo in the city of Chicago, which is her primary residence. Recently, she stated that she wants to gift me her condo and eventually move into a senior home. As she is getting older in years, she is looking to eventually put all of her assets under me. Her goal is to make sure all of her assets are somehow allocated to me and other family members before she moves into her senior home.

What would be the best way for her to gift me her condo by putting the title and loan under my name?

Stanley Bronstein · Answer

@Victor So If your parent is going to want to eventually qualify for assistance when she goes into a senior home, you definitely should talk with an elder law attorney who is licensed in your state.

That is NOT optional. It is highly recommended. The money you spend up front will more than pay for itself considering the amount of problems you will avoid in the future.

Also, the $15,000 per year limit applies, BUT you have the lifetime exclusion and if you make gifts along the way that are over the $15,000, you can have a CPA file a gift tax return for you and designate some of your lifetime exclusion limit toward the excess amount of the gifts she made.

Plain and simple, you need to do 2 things:

1) Talk to and probably hire an elder law attorney

2) Talk to and probably hire a CPA who is familiar with filing gift tax returns. If you need a referral, ask the elder law attorney. They will probably have one or more CPAs they've worked with in the past who know what they are doing.

Brit F. · Answer

@Victor So, you may want to consult with an Elder Law attorney, a CPA, and lender to navigate potential risks like: non-assumable mortgage (POA might be a workaround?), estate/gift tax, and Medicaid's asset look back period.

In the best case, the gift(s) stays under the threshold, the deed transfer to you is a small filing fee to the county, the lender allows you to assume the loan, and your mother won't ever need Medicaid.

@Jaysen Medhurst, the $15k amount you referenced refers to the limits on exclusions for reporting gifts. Meaning, below that limit, nothing is reportable to the IRS. Above that amount, it's reportable, but not taxable until it exceeds the estate/gift tax threshold, which is the $millions as you mentioned. (I'm also not a CPA though).

Jaysen Medhurst · Answer

@Victor So, I'm not a CPA, so take this with a grain of salt: The limit on "gifts" by the IRS is $15k/person/year. The difference between that and Fair Market Value of the property would be taxable.

That being said, it may not make sense for her to "gift" you and other family members her assets. Assuming her net worth is below the estate tax cap ($11MM, I think), you wouldn't pay taxes when you inherit her estate upon her passing.

If the question is control over her assets and the ability to make financial decisions, you really should speak to an estate lawyer about setting up power of attorney, etc. and making sure that your mom's wishes are properly documented and communicated.

Victor So · Answer

Thank you all for the advice!!

What is the easiest way to gift a property?

What is the easiest way to gift a property?

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