We live in NJ. My dad broke his hip from a car accident, went through therapy, came home to his house, and fell down his s...Read more
Yes, the new home can also be held as a life estate. Buying a new life estate has no immediate effect on capital gains. The purchase of the new house has no effect on any capital gains that may be due on the sale of the existing house. However, it may affect the capital gains on the sale of the new house. Typically, at your mother’s death the basis in the property would be adjusted to its value at that time, a so called “step up” in basis. If the property is purchased as a life estate with the remainder owners contributing their fair share of the purchase price the life estate is not created by gift and may not be entitled to a step up in basis at the time of your mother's death. On the other hand, the basis will be the new purchase price rather than that paid by your mother when she bought her current house, so the capital gains should be lower. For more information about capital gains, click here.
For information on life estates, click here.
Local Elder Law Attorneys in Ashburn, VA
Judith Mtinick is well known for acting as a guardian, conservator, trustee or agent on behalf of clients or by court appointment. This experience gives her a wide perspective and extensive practical knowledge that she uses when advising clients in drafting their planning documents. Her experience, as a court appointed...
Bill founded The Estate Planning & Elder Law Firm, P.C. in 1994. Bill limits his practice to the areas of estate planning and administration, incapacity planning, Medicaid, asset protection planning, and elder law. He is one of (15) fifteen attorneys practicing in Virginia, Maryland and the District of Columbia, ce...
Medicaid Rules, etc