Legal Question in Wills and Trusts in Massachusetts

Re: Deed, taxes, Medicare, Trust

As an elder law attorney, my best guess is that your parents transferred the title in 2002 at least in some part for Medicaid planning purposes. The gift is old enough that it would be counted as as a disqualifying transfer by MassHealth.

Unfortunately, what works for Medicaid planning often does not work for tax planning. I do not know whether they were told that by doing so, they gave any child who did not live in the home a capital gains tax liability if the house were to be sold.

The Deficit Reduction Act of 2005 greatly changed the rules concerning making gifts to children and transferring assets into trusts. The penalties by MassHealth for gifts and transfers to irrevocable trusts have become more draconian. You have to consider whether there are enough other assets to cover a disqualification period of as long as five years.

I've practiced elder law for ten years, and strongly advise that your mother contact me or another elder law attorney to review her options and to make sure that her estate planning documents are up-to-date.

Re: Deed, taxes, Medicare, Trust

It would appear someone has done some elder law planning. The transfer is old enough not to be effected by the Medicaid look back rules, assuming transfer was before November 16 2002.

Without more information and without looking at the deed it is difficult to determine the tax implications.

I am an experienced real estate and estate planning attorney and do a fair amount of elder care planning.

I would suggest you and at least one of your siblings and the surving parent sit down with an attorney and go over what was done and what you want to do.

There are some options for deferring or avoiding some or all of the tax as a result of the sale.

Please feel free to call me if you have questions.