[USER]

Hi everyone, I need help with my first course of action legally. This will sounds completely immature but would love to hear advice. 42 years old married with child living in New York State. Lucky enough to live in my parents house for last 10 years they are retired and live in different state. Actual legal possession of the residence has never changed hands, still legally in fathers name. I am not worried about getting kicked out or anything, good relationship. I spoke with my father and he does not have a living will, current age in early 70s. My father is still married to my mother. I urged him to get a will immediately. I know how important this is and not looking for help to approach him.

Question is what exactly do they need as far as will, or just have them speak to a qualified lawyer. Second question, what would happen if my father passed away suddenly and my mother survived? What would happened if both passed away at same time?

House was purchased 40 years ago by my father for around $50,000 and worth currently 500,000-600,000. If it were gifted to me what would be tax implications.

Thank you for help.

[Matty]

It’s not immature at all to want to ensure your family’s legal affairs are in order, especially when it comes to something as important as estate planning. Given the circumstances you’ve described, here’s what I would recommend as your first course of action.

First, it’s crucial for your father to have a comprehensive estate plan in place, which includes a will. I understand you’ve already urged him to get a will, and I strongly encourage you to continue advocating for this. It’s best for your father to consult with a qualified estate planning attorney who can guide him through the process and ensure his wishes are properly documented and legally binding.

In the event of your father’s passing, if your mother survives, the ownership of the house would typically transfer to her as the surviving spouse, assuming they own the house jointly. However, since the house is still in your father’s name, it’s crucial to clarify the ownership structure and consult with a legal professional to understand the implications. If both your parents were to pass away simultaneously, the distribution of assets, including the house, would be governed by state laws of intestacy since there is no will in place.

Regarding the tax implications of gifting the house to you, it’s essential to consider potential gift tax consequences. While gifts of up to a certain value are generally excluded from gift tax, the transfer of a house valued at $500,000 to $600,000 could exceed this threshold. Consulting with a tax advisor or estate planning attorney would be wise to assess the tax implications and explore strategies to minimize any potential tax liabilities.

All that being said, I highly recommend prioritizing the creation of a will for your father and seeking professional legal and tax advice to address the specific circumstances and concerns surrounding the ownership and transfer of the house. It’s essential to approach these matters thoughtfully and with the guidance of qualified professionals to ensure the best outcome for your family.

Good luck and stay detail oriented during the process!

[Stacey]

Not legal advice but I would suggest a trust. Less legal and tax implications and complications.

[Erika]

See if you can become a co-owner with rights of survivorship, bypassing the taxes at death.

[Kelly]

Call a family estate planning attorney.

You don’t want to skimp on this. If they don’t want to bother but you have their permission pay to get the proper documents drafted and deliver for signatures.

[Bill]

They need a will. Without one, the house will pass through probate based on the laws of your state. In general, that means it would go to his wife. Also, depending on your state, this might be marital property anyway and his wife may be entitled to half no matter what his will states, so you really need an attorney asap.

For sure, don’t try to gift the house. There is no gift tax applicable, but it creates a tax timebomb. If you get an asset as a gift, the basis doesn’t reset. If you inherit it, your basis becomes market value at the time the person passes.

So, for you, that might be a half million dollar deduction.

[Megan]

Another thing to consider is if you dad is ever in the situation where he needs to go to long term care. In some states they will take possession of the assets to pay his bills at the long term care facility and you are left with nothing. A good attorney needs to set up his estate several years before this may come into play.

[Author]

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