[WSBAPT] Real Property Transfer Out of Trust

[David Kincaid]

I believe a life estate is worth a percentage of the property's total value
and counts toward the individual's asset limit. This may make Medicaid
eligibility difficult.

On Thu, Aug 13, 2026 at 1:05 PM Nick Pleasants <npleasants at ohswlaw.com>
wrote:

> 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*
>
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>
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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)
> marka at mbaesq.com
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-- 
Best,
David Kincaid
Kincaid Law PLLC
(360) 914-9204
www.davidkincaidlaw.com
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