[WSBAPT] Real Property Transfer Out of Trust

[Nick Pleasants]

Mark,
The trick that I have seen before is a grantor-retained life estate. See, e.g., http://archives.cpajournal.com/2001/0700/dept/d076301.htm
Not sure how retaining a life estate will affect Medicaid.
This is not intended to be tax advice to anyone. Consult your own CPA.
Best,
Nick
Nicholas Pleasants | Shareholder
[OseranHahnAttyatLaw 8]
11225 SE 6th Street | Suite 100 | Bellevue, WA 98004
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From: wsbarp-bounces at lists.wsbarppt.com <wsbarp-bounces at lists.wsbarppt.com> On Behalf Of Mark Anderson
Sent: Tuesday, August 11, 2026 2:53 PM
To: WSBA Real Property Listserv <wsbarp at lists.wsbarppt.com>; WSBA Probate & Trust Listserv <wsbapt at lists.wsbarppt.com>
Subject: [WSBARP] Real Property Transfer Out of Trust

Dear Mates:
PC wants to transfer real property out of her revocable trust to one of the contingent beneficiaries so that PC can qualify for Medicaid.  [The transfer would be exempt from the look back period under WAC 182-513-1363(4)(d)(iv)].
If the transfer is characterized as a gift, I understand there would be no step up in basis for the purpose of capital gains tax.  PC has owned the property since the beginning of time, so the capital gains impact would be great.
Are there any other options for structuring or characterizing this transaction that would result in a step up in basis for the beneficiary?
Thanks in advance.
Mark B. Anderson
ANDERSON LAW FIRM PLLC
821 Dock Street, Suite 209, PMB 4-12
Tacoma, Washington 98402
+1 253-327-1750
+1 253-327-1751 (fax)
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