Legal Question in Wills and Trusts in New York

My father-in-law (age 77) inherited his father's 2nd home (lake cottage) about 4 years ago. He wants to "gift" it to his 5 adult children. All but one of the 5, do not want the responsibility of the house (taxes, great upkeep and repair, etc). One daughter, however, WOULD like to purchase the house for her own use, but also to provide a nest egg for my father-in-law's care, should he need it (he currently lives in an independent living apartment and has adequate social security and annuities to live. Would it make the most sense to have my father-in-law put the house into a trust for the 5 children and then have the one daughter start a payment plan or something to the other siblings? Or is it better to sell the house outright, to the one daughter now---and put the money from the sale into the trust (and then this cash, if not needed for his care, would be divided among the brothers upon her death). Either way, we know we face the 5 year look back for medicaid, but is the trust the best way to go? Is selling the house to the one daughter now the "cleanest" way to do things? What are the tax ramifications? Also..a real estate person has estimated the fair market value of the property, as is, to be worth about $150,000. Would we be able to sell it to the one daughter for a reduced amount (say, $120K) and not face scrutiny from Medicaid, etc. (again--assuming we go beyond the 5 year look back). thanks.


Asked on 9/10/10, 8:08 am

2 Answers from Attorneys
Walter LeVine Walter D. LeVine, Esq.

I like the concept of selling it now and putting the proceeds in a trust, to go to the siblings when the father-in-law dies. If the daughter cannot pay for it all at once, the house can be transferred to the trust.and the trust give her a mortgage, for nominal or no interest. An attorney familiar with elder law, trusts and gifts should be consulted so all areas of law involved are properly covered. This is a response to an Internet question and the reply is not intended to be legal advice or as creating an attorney-client relationship.

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Answered on 9/15/10, 9:22 am

If Medicaid is a concern, then you should do your Medicaid plan first, and then fit the rest of the plan around that. Your fact pattern is a bit too long to address in a public forum. There are a number of different ways to do this, again, it depends on your primary goals. Feel free to call or email me if you wish to discuss this in depth.

Dave

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Answered on 9/15/10, 11:03 am


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