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equity transfer

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needadvise45

Junior Member
Florida
Hi I need advise, My mom is in the early stages of
dementia, my mom has be married for 28 years to a younger man who at
this point cannot handle the juggle of my mom's dementia and his job
and the change in their marriage due to this horrible disease.At
this point Ive decided not to argue about it and let him depart with
no guilt. My mom is 66 he is only 55 so he wants a divorce, so be it.
The husband still wants my mom to be cared for, so I of course with
no hesitation volunteered.
Here is my problem the husband made me POA and we are selling their house
and building a new one for my mom and me and my children to have a bigger place to live in
with the equity from the sold house so I can take care of her, but the house in going to be in my
and my brothers name so my mom will always have a house to live in. Now the house just sold
and the equity is being wired into my bank account
with my brother as the beneficiary incase I die, so he can have the
money to pay the builder the equity is buying the new home
it will be mortgage free. My mom's income is low so that is what has to be.
Do I have to pay taxes on this money as income?
Will the equity be considered as still as my mom's assets? What
happens if we sell it after she passes? Will I have to pay Capital Gain?
The divorce papers between them will not show assets for all they own
together will be sold and transferred before a divorce. We
settled together me and my brother w/ the husband for her, she is
getting her fair share but we are scared to put anything in her name
due to future law suits, hospital bills, nursing home leans? And
it being in my name is scary also. HELP!
 
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tranquility

Senior Member
You have a complex situation with many issues. I don't know all the answers to all the issues, and don't have the space to provide answers to the ones I do know. Bottom line, see an attorney! For many reasons I don't think your plan is a good one. A good attorney, UP FRONT, can make things go much easier.

Just *some* issues
1. Mom has dementia, you are the POA. Does FL law even allow you to gift her property, let alone to yourself or for your benefit?

2. Would the other heirs of your mother feel you have coerced her? what about down the road?(Different question than above.)

3. If you were alowed to make such a gift, you would take your mother's basis. If you inherited it you get a step-up in basis. Gifting property before death is not often a good thing. (This may not be important as you took money to reinvest. I would have to look as it could be re-invested in another property without there being a sale of the original property because of the facts.)

4. Right now, if the house is hers and protected by homestead, you have protection from the liens and lawsuits. If you transfer, medicaid has a look back time and they can go after the assets that are gifted away. To make a gratuitious transfer would make the formerly protected asset vulnerable. Also, you need to be careful of making a fraudulent transfer. The rule on this is not as simple as you might think for a person in your mom's (Hence, you, as POA.) situation.

5. While a true gift is tax free to the receipient, is there a true gift (disinterested generosity) here? You are doing things for compensation it seems. That could change everything.

I won't go on. Your plan is very, very bad on many levels and may be illegal. See an attorney. A lot of what you want to accomplish is possible if you do it right. You may need to get a court's permission for some of the doing it right, but what's the rush?
 
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seniorjudge

Senior Member
florida
The person that answered my post thank you! I will get an Attorney, By the way, does it matter that my mom's husband is the one who made me POA he signed as a wittness, so they could see the house.. The buyer refused to sign fpr my mom having dementia, my mom has wanted to sell to move by my sisters for a while, I will move with her after her divorce to take care of her we know she will get ill slowly, the house was going in my and my siblings name so she cant lose it in the future, is this a bad move? I am willing to change anything to not hurt my mom's future
Q: the house was going in my and my siblings name so she cant lose it in the future, is this a bad move?

A: How will that happen?
 

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