[WSBAPT] Can you just give it away and stay healthy for 5 years?

Tue Jan 2 17:57:13 PST 2018

I am always concerned in cases where “child” is stating that “parent” wants to give his/her house to  child. Heather’s points are also well taken. I ask my clients (I always represent the elder in these matters) if they are prepared to have their house attached by their child’s creditors. I also ask the child to obtain an umbrella insurance policy that will cover the risk that they are at fault in an accident that kills the brain surgeon and her lawyer husband, leaving their 6 kids as orphans.

IF Mom really wants to do this, make sure that there is a Life Lease written to protect the giver where the child. The lease should grant the parent the right to live in the home for their remaining life. The leases that I write contain a clause that terminates the lease if the giver is no longer able to live independently in the home and also authorizes his/her Agent named in a DPOA (usually NOT the child to whom the house was gifted) to voluntarily terminate the lease on behalf of Mom. The terms of the lease state that the parent will pay taxes, insurance and maintenance, but I try to figure out if the child will spring for appliance replacements and major repairs (i.e. a new roof) and write that into the lease.

The Life Lease allows the parent to continue receiving a Senior Exemption on their taxes, but they have to re-apply to continue the Senior Exemption after the gift.

DSHS has not tried any kind of recovery by implying a life estate in the cases that I have worked on thus far.  We record the Deed, but not the life lease.

I also tell the child that receives the house that they need to talk to me or another competent elder law attorney if Mom needs care during the 5 year look back. They have to give the house back, if the calculated period of ineligibility is too long for them to pay privately for the parent’s care during the ineligibility period.

Jane Bitz.

Jane G Bitz
Of Counsel
Wolff, Hislop & Crockett, PLLC
12209 E Mission, Suite 5
Spokane Valley WA 99206-4824
(509) 927-9700; FAX (509) 777-1800
jbitz at whc-attorneys.com<mailto:jane at jbitzlaw.com>

From: wsbapt-bounces at lists.wsbarppt.com [mailto:wsbapt-bounces at lists.wsbarppt.com] On Behalf Of Heather deVrieze
Sent: Tuesday, January 2, 2018 4:54 PM
To: WSBA Probate & Trust Listserv <wsbapt at lists.wsbarppt.com>
Cc: Lorrie Knowles <lorrie at wyerslawpc.com>
Subject: Re: [WSBAPT] Can you just give it away and stay healthy for 5 years?

It is important to remember that if son owns the house, there is the risk of something going wrong in his life (divorce, death, accident, disability, etc.) and there is no reason in particular to believe that the rule now will continue to be the rule in the future.

Does son take on taxes and insurance? Is mom going to pay rent? Who gets to deduct the cost of property taxes? Does mom currently qualify for reduced property taxes? Will she want to in the future?

Lots to consider, and long term care is only one issue in the crystal ball.

Heather

Heather S. de Vrieze
Attorney-at-Law
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From: wsbapt-bounces at lists.wsbarppt.com<mailto:wsbapt-bounces at lists.wsbarppt.com> [mailto:wsbapt-bounces at lists.wsbarppt.com] On Behalf Of Teunis J. Wyers
Sent: Tuesday, January 02, 2018 3:39 PM
To: wsbapt at lists.wsbarppt.com<mailto:wsbapt at lists.wsbarppt.com>
Cc: Lorrie Knowles <lorrie at wyerslawpc.com<mailto:lorrie at wyerslawpc.com>>
Subject: [WSBAPT] Can you just give it away and stay healthy for 5 years?

Client is a widow. Owns home worth about $350K free and clear, with a basis of about $110K, and an annuity with $56K in it.  Her son suggests that she gift the home to him now, understanding that he will miss out on a stepped up basis, but thinks she is healthy enough to stay out of care for 5 years.  My guess is that it's not that simple.  What do I tell him?  I know that we would not want to reserve a life estate, because that would create a link to a Medicaid reimbursement claim if she did go on care at any time.

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