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What are the first steps in getting my mother's home deeded to my siblings and me?

Mike m. asked...

My mother has moved to a retirement home and she has asked me to dispose of the family home. With my mother's approval and assistance, my brother and sister and I have worked together well to sort out the items of interest we would like to keep. We are now ready to sell the house, although she has now suggested that she deed it to the three of us so that she does not have to worry with real estate agents, etc. Is there a list of tasks for an undertaking of this nature: appraisal, changing insurance, etc. Where do I start? Thanks for your help.

Expert Answer

Steve Weisman hosts the nationally syndicated radio show A Touch of Grey, heard on more than 50 stations, including WABC in New York City and KRLA in Los Angeles. He is a practicing lawyer specializing in estate planning and is admitted to practice before the United States Supreme Court. He's a public speaker and commentator who has appeared on many radio and television shows throughout the country, and he's the legal editor of Talkers magazine, the preeminent trade publication of talk radio. His latest book is The Truth About Avoiding Scams.

The first thing you should do is ignore your mother's advice.

I know this is heresy and I am sure your Mom has given you great advice in the past. But this time her advice would result in you and your siblings drastically increasing your income tax liability.

If your mother were to give you and your siblings the house, the three of you would not be able to take advantage of the $250,000 exemption from capital gains taxes that your mother has because the house would not be your primary residence. However, if the title is kept in her name and sold by her, she would be able to significantly avoid or even eliminate income taxes because of the availability to her of the $250,000 exemption.

Fortunately, there is a way to make Mom's life easier and still not incur more income taxes and that is to have your mother execute a Durable Power of Attorney whereby she appoints you to sell the home on her behalf. In this way, you can do all of the work for her and even sign the deed (although it would be better if she actually signs the deed.)

If you sell the home on her behalf by using the Durable Power of Attorney, you will be able to utilize her $250,000 capital gains exemption. After getting a lawer to draft the Durable Power of Attorney document, contact a real estate agent who will be able to help you with the details of selling the home, such as appraising and marketing it in order to get the best sale price.