“My uncle is very sick and I’m his only heir. He’s deeding me his home now to make it easier for me to sell it after he’s gone. Of course he’ll stay there as long as he lives. Is there any downside to what we’re planning to do?”
***ANSWER:
STOP! Do nothing until you consult with a tax professional!
I had a client in this EXACT situation 3 years ago and it cost him $110,000 in unnecessary taxes! You and your uncle need to seek professional tax advice now before you do anything. (I know a great tax attorney if you need one.)
ADDED NOTE: There are other potential risks to the person deeding away part or all of their interest.
1. While the person you deed to is surely someone you love and trust, I’ve heard of cases where that person unexpectedly sold the home out from under them. Rare but possible.
2. A more likely risk is the person is stable, but has a judgement or IRS liens against them and the owed party forces the sale of assets, including the home.
So before you deed away any ownership in a property, seek tax and legal counsel.
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