Selling Real Estate Held in a Life Estate

[tauruz]

My question involves estate proceedings in the state of: MA.

My mother's home is held in a life estate which was drafted in 1997,she can no longer live there safely and is residing in a nursing home. I am the trustee. I plan to sell her home. I have questions about handling the proceeeds and the tax consequences.

1. Can I use my mother's tax return and apply the $250,000 exemption for capital gains?
2.Are the proceeds of the sale attachable when I apply for Mass Health coverage to pay her nursing home expenses,this will be necessary in 18 months.
3.How much lead time should be planned when applying for Mass Health coverage?

Thanks in advance for any help you can provide.

[Mr. Knowitall]

What exactly do you mean by "My mother's home is held in a life estate"? Your mother is the life tenant? Who are the remaindermen?

[jk]

from reading the OP's other thread, it appears mom has a life estate in the property.

As such, there is nothing to really sell. The life estate can be sold or rented but what you are selling or renting is the use of the property for the life of your mother. The remainderman (men) take possession of the house once moms life estate is extinguished by her passing. You cannot actually sell the title to the property unless you are the sole remainderman.

You do mention you are the trustee. The trustee of what?

[tauruz]

My sister and I are remaindermen,my mother is the life tenant.

[jk]

then all you can sell that is your mothers is her life estate. After that is sold, you and sis are still the owners of the property. Of course, you and sis can sell your shares but moms life estate is still in force so she is still entitled to occupancy or the income generated by the use of her life estate during her life.

[seniorjudge]

My sister and I are remaindermen,my mother is the life tenant.

Then why do you think you are the "trustee"?

Life estate refers to interest, not possession.

I could own the life estate in real estate in Hawaii and live in Maine.

So, yes, as JK says, y'all will have to sell all interests: the life estate and the remaindermen interests.

I am NOT a tax attorney, but what your ma owns is worth very little; you need to check with a tax lawyer or tax CPA.

Also, check with Mass Health; your ma's asset has little worth and the value goes down every day. It may not affect Mass Health.

[tauruz]

Thank you,that helps