Legal Question in Real Estate Law in Illinois

Re: Life Estate

I'm not sure if I understand your question. However, a land trust is probably a good idea, as is a living trust. If it's deeded to you directly, an accountant should be consulted first about the tax implications. First of all, it's considered a gift and there are potential gift tax implications. I believe your parents can get around that by taking a portion of their estate tax exemption. A form still has to be filled out for Uncle Sam in that case.

Another issue is valuation. You as the donee will acquire their basis if they gift it to you, meaning when you go to sell it, your capital gain will be higher than if it were inherited. Talk to an accountant about all these details as I'm a real estate attorney, not a tax attorney.

Finally, if you're asking whether your parents will be protected, the answer is they'll be protected much better if either trust is used instead of a straight quit-claim transfer.