Legal Question in Real Estate Law in Pennsylvania

Re: Transfer ownership of grandmom's house to granddaughter.

What your mother need to do is execute a new deed which you then need to record at the Recorder of Deeds.

However, from a tax standpoint that is a bad idea. If you inherit the house your cost basis is what the house is worth at the time of her death. If she gives it to you now its cost basis will be what ever she paid for it. Which may be a lot less than its current value. If you should sell the house in the future you would figure the capital gain as the selling price less the cost basis of the house and the cost of any improvements. i.e. a new furnace. Depending on how close you think you'll be to the $250,000 capital gain exclusion it may pay to just have her leave you the house in her will. In the alternative you could put the house in to a trust.

If you have any questions feel free to contact me. The initial consultation is free.

{John}

Re: Transfer ownership of grandmom's house to granddaughter.

You asked about transferring property from your grandparent's name to yours.

My colleague is correct but failed to consider all the risks. A lawyer's job is not just to carry out a transaction but to think through the transaction and prepare for all foreseeable eventualities.

You may pass before your grandmother, and if she's given you her home there may be no place for her to live. Or your grandmother may need medical assistance at some point in the future. Unless the transaction is structured properly Medicaid can "lookback" five years and see if there were any transactions that disposed of property. If she simply gives the house away then Medicaid can unwind the transaction or deny coverage.

There are means to create a transaction that solves both goals. Additionally, you must consider whether grandma has or needs a place to live for the remainder of her life.

You need to work with an attorney, preferably one who practices elder law, to come up with a solution that solves all your goals and not just the end result you desire.

A quick suggestion would be to have the house transfer take place as an arm's length sale. You would make payments to your grandmother or she could forgive those payments as and annual tax-free gift (currently up to $12K per year). You could also provide what is called a life estate for your grandmother. This would allow her to remain in her home for as long as she lives, no matter what happens to you.

Paying an attorney now to create a plan that will provide for everyone will be less expensive than the potential costs later.

Regards,

Roger