Legal Question in Wills and Trusts in Michigan

Probate Question in Michigan
My grandmother is 97 on medicaid and in a nursing home. I have a durable power of attorney over her and her residense is being willed to me.
I am moving into her house and would like to refinance the property to get some money for remodeling. The bank has told me that I need to have my name added to her property. How would I have my name added? Would this mess up her medicaid or would I have to pay taxes? How can I have my name added without interfearing with her situation?
Sincerely,
Sarah

Asked on 3/18/04, 6:58 pm

2 Answers from Attorneys

Jesse Sweeney Sweeney Law Offices, P.L.L.C.

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Re: Probate Question in Michigan

Dear Sarah,

Don't do it! Should you place your name on the deed you will then be taxed as to the stepped-up basis of the property. In essence you will be taxed on the appreciation of the value of the property from the date it was purchased. So, if your relative purchased the property in 1950 and increased in value by $200,000, the IRS will treat that as though you RECEIVED $200,000 and you will have to pay taxes on that amount. It really is not worth it. This tax is AVOIDED if you simply wait for the property to pass through the will upon her death. If you have other questions, contact an estate planning attorney as soon as possible.

Answered on 3/19/04, 9:17 am

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