Legal Question in Real Estate Law in California

Your mother should consult with an attorney that does estate planning and especially elder law. She could execute a quit claim deed or grant deed transferring the property to your name. This could result in tax consequences that you have not anticipated. Also if the transfer is done to avoid the state collecting for services provided can be set aside as a fraudulent transfer. The cost of obtaining proper legal advice and proper estate planning is generally less than the tax saving.

Assuming you and your mother have considered the issues raised by Mr. Johnson and decide to go through with it, one simple mechanism for accomplishing this is a deed from your mother to you, as your sole and separate property, reserving life estates to herself and her brother. Other methods of accomplishing the same result would be a will or a trust. Any of these should be drafted by an attorney.

Gifts from your mother to you are separate property and your husband would have no claim to them if you ever divorce, whether you receive them during her lifetime or after she passes.

Most attorneys with some experience in the areas of estate planning, wills, trusts, probate and/or taxation would advise against this, for the reasons pointed out in the preceding answers, but to recap, because the younger generation (you, the daughter) will 97% of the time have a heavy and unnecessary liability for federal and state capital gains taxes when you eventually sell, becuase the tax collector will base your profit on what your mother had invested in the house, not the value on the date you inherit.

For example: If your mother and father bought the house in 1955 for $25,000, and your mom gives it to you in 2009 and you sell it in 2015 for $500,000, there is a $475,000 capital gain whoivh will be taxed to you at 15% (or likely a higher rate in the future!) and you will pay a capital gains tax of $71,250. On the other hand, if you inherit the house in 2015 either by will or through a living trust, and then sell, the capital gain is zero and you owe no tax. Or, if you inherited it in 2010 and the value then is $400,000 and sell in 2015 at $500,000, your gain is $100,000 and your tax is $15,000.

A living trust has the advantage of bypassing probate; both wills and trusts have the advantage over "deeding over" or "gifting" of giving you a stepped-up valuation as of the date of inheritance and thus lower taxes.

Here, using a will or trust has the added advantage of diminishing or eliminating the possibility of a charge that the two of you have engaged in a fraudulent transfer (if there is a potential MediCal liability at the time of the transfer),