Legal Question in Real Estate Law in Florida
quit claim deed w/ a life estate
In 1995 I went to an attorney with the intentions of protecting my mother’s assets in case she had to go into a nursing home (she was 72 at the time). Her largest asset was her home @ a FMV of $250,000.The attorney recommended that--name removed--set up my mother’s house with a quit claim deed, giving her a life estate.--name removed--followed the attorney’s instructions. Now 12 years later her home has increased in value from approximately $250,000 to $1,000,000 (4bdrm, 4bth, waterfront property).
My question is whether or not this set up is still the best idea in light of the increased property value of her home. Also, is our basis (my sister and mine) measured back in 1995 when--name removed--had the quit claim deed established or will it be when our mother actually passes?
2 Answers from Attorneys
Re: quit claim deed w/ a life estate
You really should consult with an attorney regarding assets this large. This site is intended more for people who can't afford legal services and answering simple questions that have simple answers. Your question is more complex because of tax and other implications.
Re: quit claim deed w/ a life estate
NOTE: This communication is not intended as and should not be interpreted as legal advice. Rather, it is intended solely as a general discussion of legal principles. You should not rely on or take action based on this communication without first presenting ALL relevant details to a competent attorney in your jurisdiction and then receiving the attorney's individualized advice for you. By reading the "Response" to your question or comment, you agree that the opinion expressed is not intended to, nor does it, create any attorney-client relationship, nor does it constitute legal advice to any person reviewing such information, nor will it be considered an attorney-client privileged communication. If you do not agree, then stop right here, and do not read any further.
You have raised several issues. First, the quit claim deed may have been a good idea at the time. Unfortunately, your basis in the house is the value of what mom paid for the house and NOT the value on the date of transfer or the value on the date of her death. While quit claim deeds may protect some assets, you do not get the advantage of a stepped up basis in the value of the house as you might have had it gone through probate. As to whether or not this is still the best way to protect depends on many issues including mom's health, the expectancy of the need of a nursing home and/or medicaid assistance, and her other assets. Your mom truly needs to meet with an elder law expert to discuss all of these issues in order to get any valid advice.
Scott R. Jay, Esq.
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