Scenario:
My mom has quitclaimed her house to me. But we were advised not to file it as because it would lead to problems for the Medicaid assistance that she gets. If
I file the deed would I have to pay the property taxes? Will the state take away the Medicaid assistance? How long do I have for the filing before the deed becomes invalid?
Solution:
Being the grantee or receiver of property, you need not have to pay taxes for filing the quitclaim deed. Instead your mother who's the grantor may have to
pay gift tax provided the value of the gift/property exceeds $12000 (for 2008) and if she hasn't yet offered gifts worth more than $100,000 in total till now in her lifetime.
Regarding the property taxes, you'd have to pay them if your name is on the title. I hope your mother has been paying the taxes so far. Therefore, the property records must be showing her name as the taxpayer and you'll have to change it so that the tax bill comes in your name. You can send a request to the
County Tax Assessor's office for a change in the taxpayer's name.
Now, to have your name on the title, you need to file the deed as early as possible because every state has a time period after which the deed becomes
invalid. However, if your mother is on Medicaid assistance while the property is being
transferred as a gift (less than fair market value) through quit claim deed, then such a transfer can be reversed under the Uniform Fraudulent Transfer Act (UFTA).
A transfer by quitclaim in this situation is likely to trigger an action by the State against your mother and her home under the UFTA. The funds provided through Medicaid are taxpayer funds and the state has a duty to the taxpayers to obtain the funds back from the debtors' assets where available. If your mother is under nursing home care, the nursing home may take the same action if Medicaid does not disburse funds owed to the nursing home.
The best way to protect the home is to execute an Enhanced Life Estate Deed as a result of which your mother will retain ownership rights along with you. Such a deed will protect the home from Medicaid claims and enable you to receive the property after your mother's death thereby making the home free from Medicaid claims and liens.
