Best practices these days for inheriting mom's condo in Massachusetts?

March 29, 2023 1:09 PM

I can't be the only Gen Xer trying to figure out the best way to have my mother transfer her condo to me, either before or after her death. Deets inside.

My mother and I have discussed this a few times, but this FPP, and especially this comment, have reminded me that I need to start thinking about it more.

This is in Cambridge, Massachusetts. My mother is 82 and mostly healthy, though she is starting to be more forgetful lately. She has actually been lousy with money her whole life, and is happy to let me research this. Due to said lousiness, she currently owes about $225,000 on a condo worth $665,000. She would like me to have it when she's gone, and I would like to have it when she's gone. Being a single woman who hasn't invented nuclear fusion, it's important to me to hang on to an asset (to say nothing of housing) that will only increase in value. But at present, there's little money for me to throw around, and I want to figure out the best way to do the transfer with the least amount of pain.

So, what is the best thing to do? Everything I search for online seems to have all these negatives: If she just leaves it to me in her will, then OMG PROBATE. If she transfers it to me before that (in a trust? A living will? What are those? I'm having trouble figuring out how they work in Massachusetts, search results are just vague, national suggestions), then the increase in property taxes (she gets a senior discount) will negate the OMG PROBATE. But shouldn't I do that anyway, so that the nursing home can't take the condo away if she has to go to one? (She is on Medicare and supplemental with Tufts.)

I so confused!! I'm assuming I'll need a lawyer, who may have good advice, but would like to get advice from you guys too since you always have good ideas. If you know of a good lawyer in the area, feel free to send a Memail.

Thank you all!

posted by sockerpup to Law & Government (14 answers total)

Lawyer is the person with the answers. Relatively low cost. My mother signed a property over to me for a dollar in Pennsylvania and I transferred a property to my kid for a dollar in PA. Both times, with lawyers, relatively cheap and painless. Don’t know Massachusetts but IRS says parents get to give a certain amount to kids tax free.
posted by Peach at 1:12 PM on March 29, 2023 [3 favorites]

It's no big deal if she just leaves it to you as a bequest in her will. The standard deduction for estate tax is something like thirteen million dollars. Probate takes a while, but it's not the end of the world. If your mother has a good will that names you as her heir, at the worst you should be able to do informal probate, which is not such a big deal. Massachusetts has a good explainer for probating wills.

You could also explore joint ownership where you have a right of survivorship.
posted by slkinsey at 1:51 PM on March 29, 2023 [2 favorites]

Please talk to an elder care lawyer in your local area. Medicaid varies by state and it's really important to do assset management as early as possible to ensure it doesn't go to a long term care facility. I believe your state has a 5 year look back, so if she enters a nursing home before the 5 years or needs medicaid that can become a big problem.

Lawyer stat. Get this done ASAP.
posted by AlexiaSky at 2:13 PM on March 29, 2023 [11 favorites]

Looks like you just missed this free estate planning webinar but I'd reach out to the organizer to see if there's another one coming up or if they can put you in touch with a senior legal services attorney who can help you and your mom plan. Estate planning is the kind of legal work which is very commonly available for free for eligible individuals, or as a commenter above said, for quite low cost. You could also call the Massachussetts Senior Legal Helpline at [phone]. Or Homeowners Options for Massachussetts Elders, if your mom is income eligible (less than $30,000 a year in income).
posted by peppercorn at 2:14 PM on March 29, 2023

I would absolutely hire a lawyer to do the estate planning for you. Handling it now might cost you $1000, but you're going to be thrilled to have everything in order when your mom passes. I suspect "put it in a trust right now; you're the only trustee" is gonna be the answer

FYI probate in Los Angeles right now is taking around three years, I've been told -- just because the courts are always so backed up + they're still untangling the mess of what happened during the height of Covid.
posted by BlahLaLa at 3:07 PM on March 29, 2023 [1 favorite]

she currently owes about $225,000 on a condo worth $665,000

Is that a mortgage? Because things are more complicated when there's a lienholder involved. Start to dig out the paperwork but from my first-hand experience you're going to need to pay that debt before the house can be signed over to you.
posted by JoeZydeco at 3:24 PM on March 29, 2023 [1 favorite]

I agree with sikinsey. Probate does not need an OMG attached.
posted by yclipse at 4:31 PM on March 29, 2023

Lawyer lawyer lawyer. I just went through this. Putting the house in a trust had zero effect on her taxes and made the transfer to me a million times easier after her death. It also protects it so it isn't taken if she has to go in long term care IF it's in there for five years or more. This is very easy and plenty of lawyers do it as a package with a will, power of attorney, etc. for $1500 or so. Feel free to MeMail me - the details are very fresh in my mind and I am also in Massachusetts.
posted by rednikki at 3:57 AM on March 30, 2023 [3 favorites]

Also, in addition to the lawyer, make sure you get added as a joint account holder on her checking and savings accounts, and get the proper passwords and logins for any online accounts like Amazon, cable, etc. This will make it vastly easier to deal with any money issues that might come up before she passes and will allow you to more easily manage her estate after she's gone.
posted by teleri025 at 7:27 AM on March 30, 2023

Response by poster: Thank you all for these answers!

Can someone confirm JoeZydeco's comment that the property can't be signed over if there's a lien on it? (Yes, it is a mortgage.)

And on those same lines, would that also be true that Medicare couldn't touch the property either for the same reason?

Thank you all!
posted by sockerpup at 7:29 AM on March 30, 2023

To be clear, the issue is not Medi-care but Medi-caid. Medicare doesn't pay for assisted living beyond a certain number of days. Medicaid is a safety net program - it provides funding for elderly who don't have the assets to pay for their own care. That means if someone owns a house, they aren't broke and Medicaid expects that they will sell the house to pay for their care. They may not have to sell it immediately but when they do sell Medicaid have a right to proceeds to reimburse them for the person's care. So, people would try to get around this by selling their house for a $1 to a family member right before they needed care instead of using their house to help pay for their care. So then the government added a five year look-back rule that any sale of assets in the five years before filing for Medicaid, those assets could still be considered for whether the person was poor that the government should pay for their care instead of themselves. There all kind of argument whether that is a good policy but that is the logic behind the system that we have.

So, given that your mother may not have enough assets to pay for her own care for the rest of her life, you want to talk to a lawyer now about whether there is a way to protect the house so it will go to you on her death instead of going to reimburse Medicaid for her nursing home care. But it would certainly have to be done more than five years before she needs the Medicaid so now is the right time to ask the question.
posted by metahawk at 9:07 AM on March 30, 2023 [1 favorite]

Also there is are different kinds of trust. If you want just to avoid probate but keep control of the property and be able to change your mind later, you do a revocable or living trust. We did this and it had no impact on our mortgage or our taxes.

However, that kind of trust won't protect assets from being included in Medicaid calculations (because it is revocable). Your mother need an irrevocable trust where once it is set up, she can no longer change her mind about what happens to the house. She can still benefit from it in some ways but there are limits. So really important to get a lawyer who understands this stuff. (Shouldn't be hard to find, it comes up all the time). But it does change the title on the house so I think you are right to want to double check on the impact on the mortgage and taxes.
posted by metahawk at 9:14 AM on March 30, 2023 [1 favorite]

Look, I'm not a lawyer, I know nothing about Massachusetts law, but in general probate is something anyone with more than a bank account in terms of assets wants to avoid. For one thing, an a pandemic it can take months to a year in uncontested cases. For another, the fees tend to be high, starting at 1% of the assets, so the cost would be thousands at a minimum. A bare bones trust is likely to be cheaper and is a multiple faster.
posted by wnissen at 12:31 PM on March 30, 2023 [1 favorite]

Your mother's mortgage probably has a "due on sale" clause, which means she owes the remainder of the debt instantly if she transfers the deed to you. Read the paperwork carefully with a lawyer.
posted by JoeZydeco at 7:00 PM on April 4, 2023