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Keeping House out of Probate

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1gardnr

Junior Member
What is the name of your state? Oregon

My mother wants to add my sister and brother-in-law to the title of her house, in order to keep the house from going through probate after she dies. (My brother and I agree that my sister should get the house.) Is it legal to do this in Oregon, and will it keep the house out of probate? Does this action have gift tax implications?

Thanks in advance for your help; I want to make sure we don't inadvertently make trouble for ourselves in an attempt to make things easier!
 


FlyingRon

Senior Member
What is the name of your state? Oregon

My mother wants to add my sister and brother-in-law to the title of her house, in order to keep the house from going through probate after she dies. (My brother and I agree that my sister should get the house.) Is it legal to do this in Oregon, and will it keep the house out of probate? Does this action have gift tax implications?

Thanks in advance for your help; I want to make sure we don't inadvertently make trouble for ourselves in an attempt to make things easier!
BAD IDEA BAD IDEA BAD IDEA FOR ALL INVOLVED.

Gift tax is not likely an issue unless mom has been giving away large sums.

First off, unless you use the exact correct form of joint tenancy you aren't avoiding probate.

Second, it's a bad idea for mother. She should not give up her interest while she is still alive. She may fall on some unforseen expense and need a reverse mortgage. If so, she can't get one with your siblings (presumbly they are not 65) on the title. If she wants to sell outright, sis still gets half. What happens if sis and her hubby divorce, you've got a big mess. Any of the parties can cause a partition lawsuit forcing the sale of the house (if the others do not have the ability to buy out the interest of the other party).

If mom gets incapacitated and even if sis and her hubby agree to sell, it can be very dicey trying to sell it.

Third, it's a bad idea for sister. If they take interest now, they will be saddled with the mother's presumably low basis.

The best idea would be a revocable living trust. This allows mother to control the property until she is dead or incapacitated. A successor (or alternate, depending on the circumstances) trustee can deal with the trust upon incapacitation or death. There's no probate. Sis still gets the tax benefits of inheriting the property. All it takes is a small amount of money to create the trust and transfer the home into it.
 

1gardnr

Junior Member
Thanks!

Thanks. I have been trying to talk Mom and my sister into setting up a revocable living trust; this gives me some arguments to buttress my case.
 

FlyingRon

Senior Member
Oh, and this slipped my mind when I was writing the first response (I had thought about it but my brain works faster than my fingers). If she ends up on medicare, transfers done within a certain "lookback" period will also cause headaches. Gone through this with my own mother-in-law who sold her house before going into assisted living. Thank god we got all the forms set up and signed by her while she still had at least half her wits, because now three years later the Alzheimers is so far that getting her to understand anything would be difficult.
 

seniorjudge

Senior Member
What is the name of your state? Oregon

My mother wants to add my sister and brother-in-law to the title of her house, in order to keep the house from going through probate after she dies. (My brother and I agree that my sister should get the house.) Is it legal to do this in Oregon, and will it keep the house out of probate? Does this action have gift tax implications?

Thanks in advance for your help; I want to make sure we don't inadvertently make trouble for ourselves in an attempt to make things easier!
I agree. What you propose here is a recipe for disaster.
 

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