Quitclaim vs. Will

[Rainne]

My question involves real estate located in the State of: Tennessee

My mother and I cohabit a home in Tennessee. I have a brother who lives in Florida who recently married a fairly unpleasant woman. To describe, I ain't sayin' she a gold-digger, but she ain't messin' with no... well, you get the picture.

Anyway, we have recently been discussing the fact that my mother wishes to ensure that when she dies, my brother's wife doesn't get her hands on the house, and we thought of a Quitclaim deed. My question is as follows:

If we do a quitclaim, do I have to pay estate taxes or whatever on the house once she dies and it goes into my name? Can the quitclaim be challenged if my brother or his wife decide they want to dispute her will? (I ask because due to both my brother and his wife's actions, my mom is getting ready to almost entirely cut him out of her will.)

Also, does the quitclaim have to be done through an attorney, or can we download one of these forms off the Internet and have it notarized and then just file it with the county?

Thanks in advance.

[seniorjudge]

If ma wants to quit claim the property to you now, she may.

Have a lawyer do all this for you.

[Rainne]

Will I have to pay estate taxes & such on it if we do this?

[seniorjudge]

Will I have to pay estate taxes & such on it if we do this?

You don't pay estate taxes on a transaction that is done when everyone is alive.

There may be other taxes in your jurisdiction that I am unaware of.

[Rainne]

Gotcha! Thank you very much.

[aaron]

Are you thinking of an unrecorded quitclaim deed? A deed she would execute now, but that wouldn't be registered until after her death?

[seniorjudge]

Are you thinking of an unrecorded quitclaim deed? A deed she would execute now, but that wouldn't be registered until after her death?

I certainly hope not!

Aaron, I never thought to ask those questions!

[ANM]

If your mother gifts you an interest in the home, you will not get a step-up in basis at her death like you would if you inherited the home. That can be a major tax consideration. I would not pursue this without the advice of a good estate planning attorney. The attorney should discuss all your options, including use of a life estate, immediate gifting, transfer into trust or passing property though the will. Then your mother can decide which is best.

[seniorjudge]

If your mother gifts you an interest in the home, you will not get a step-up in basis at her death like you would if you inherited the home. That can be a major tax consideration. I would not pursue this without the advice of a good estate planning attorney. The attorney should discuss all your options, including use of a life estate, immediate gifting, transfer into trust or passing property though the will. Then your mother can decide which is best.

Excellent point.