Legal Question in Wills and Trusts in Washington

Re: Property Title of Widowed Mother

Probably not, but it really depends on the tax year. Presently, if the property does not include another name, upon your death the basis of the property is "stepped-up," meaning that your heirs would not need to pay capital gains tax on the difference between the price YOU paid for the property and the sales price. This tax would likely be far greater than any costs or inconvenience associated with what should be a fairly run-of-the-mill probate.

If, however, you were to hold the property in joint tenancy with another individual or gift the property outright, a portion or all of the property may not be subject to that step-up in basis, which could leave your heir(s) with some capital gains liability.

Please note, however, that the new tax relief act provides an exemption for capital gains for modest sized estates starting in 2010. Unfortunately, with the recent events and lagging economy no future tax act is set in stone. Therefore, I would plan using the present laws, not transfer the property (unless there are separate medicaid issues you may have), and make sure your Will or Living Trust (which also avoids probate if funded properly) is in order.

Hope this helps.