Legal Question in Real Estate Law in California

The IRS lien is only one MORE reason deeding to you would be a terrible idea. You really think it's that simple to cheat the government? Do you understand the capital gains, gift, and real estate transfer tax issues involved? "Self help" in the area of real property and avoiding creditors or sheltering assets causes more economic losses probably than any other legal self help stupidity people do. Spending a few hundred or even a few thousand on a good estate planning lawyer will save you thousands in taxes and litigation of claims. Do this yourself and you and your mother will just be giving her money away.

I think you have a major misunderstanding about any supposed "need for her home to be deeded to someone else." The truth is that government health-care programs such as MediCal, which seem appropriate in your mother's situation, need to be reimbursed if the patient or the patient's estate have or had assets with which to reimburse the agency (e.g., Medi-Cal).

Here's what sometimes happens: Mom (or Dad) needs long-term nursing or hospital care, and can't afford it without, at least, cashing in the family home, which is going to become vacant anyway. So, to keep it in the family, Mom or Dad makes a gift of the house to Son or Daughter, or maybe both of them.

After Mom or Dad dies, Medi-Cal presents the estate with a bill for reimbursement of the patient's share of the costs advanced during the final illness - maybe $143,863. The estate can't pay.

Medi-Cal's investigators comb county property records and discover the former home ownership and the transfer to the family members just before Mom or Dad went in Medi-Cal. They sue the family members who now own the home, on the ground that Mom or Dad's transfer of the house by gift or for too little money was fraudulent. Medi-Cal wins.

The applicable law is Civil Code sections 3439 to 3439.12, the Uniform Fraudulent Transfer Act. Basically the UFTA outlaws transactions where assets are transferred for less than fair value where the effect is to make the transferor unable to pay his or her bills. The transfer can be un-done by the court and both the transferor (here, the estate) and the transferees (the sons and daughers, for example) would be penalized.

So, don't do it......the IRS will find you out sooner, and Medi-Cal later.

Medi-cal has particular 'Look Back" rules that may void the transfer of property to yourself. There are ways of doing transfers or other actions, but you need to speak with an attorney knowledgeable in Medical; some, but not all estate planning attorneys have the knowledge. Ask for a referral if youd like or contact a local bar association for a referral.