Tax question - My life partner and I are not married. We live in a 2 family home that she owns. 2nd floor is occupied by

[3Hotdogs]

her step daughter & family. We share expenses but do not charge rent.

As we age on, we want to sell the house to her at a substantial discount in exchange for life estate for the both of us. Since I own no share of the house, would my part of the life estate have tax consequences?

THEN --

She will take the proceeds, around $300k and invest in index funds so as to give us some money to enjoy life. We do not have expensive tastes in anything. She drives a 2013 Kia (that the grandkids make fun of her for). The rest would be inherited by the kids.

Question: If she adds me on the index accounts as Joint Tenant With Right of Survivorship (JTWROS) would there be tax consequences with this plan since I would be contributing nothing?

OR. -- just better to list me as beneficiary, with kids as secondary beneficiaries?

[Joinfortmill]

1. Find a good attorney before you do ANYTHING.

[Ocelot II]

2. You should probably talk to an accountant or other professional about this.

I wouldn't base my tax planning on info from an internet message board.

[euphorb]

3. Ask a qualified tax professional

This is not a question that should be asked on social media. You have no idea of the qualifications of anyone who would respond. Furthermore, the answer will likely depend on details you have not revealed here (and may not know are important), that a good tax professional will know to ask you about.

[3Hotdogs]

4. This would require an attorney to establish. Of course, we would ask those questions.

My purpose here, is to get a feeling on how to proceed or if the plans are ridiculous.

[Deuxcents]

5. Good on you to be planning ahead for your next chapter in life.

I’m sure a lot of us have been thinking about this, too, but never too sure what to do or when to do it. 🌺

[marybourg]

6. Also, fully inform yourselves of potential Medicaid (not Medicare)

consequences of selling the house for less than fair market value and of making a gift to you. For this, you might need to consult an Elder Law, (not Estate) specialist.

[3Hotdogs]

7. We are both on Medicare.

[IbogaProject]

8. There are three types of Medicaid

First is the health coverage for low income people. Then there is community care Medicaid for home bound elderly in need of personal assistance, they send aids around weekly, daily or in between. And finally Nursing Home medicaid. There is a look back or claw back period for below market transfers, 2.5 years in NJ for Home Care Medicaid and 5 years for in patient nursing care. This isn't about the Medicare 100 days per year of Rehabilitation after illness or injury. Yes get advice from both an eldercare attorney and from an accountant. Good luck.

[walkingman]

9. Good info - we have personal experience with the home bound assistance type. In Texas, even for that

they require you to show all of your assets periodically to qualify. My 93 yo MIL just barely qualified and we had to make sure her checking account never got above about 2K. She only had SS and that just barely under the limit. But I have to say it allowed her to live independently until she passed away. A great program.

Texas is one of those states that refused to expand Medicaid, so I don't know if that would have made things any different?

[3Hotdogs]

10. She has a home care policy for three years.

I got defined benefit pension and SS.

[IbogaProject]

11. Get an Eldercare workup no matter how prepared you think you are

It is clear you're not sure if you're asking a forum questions. This is tricky stuff especially as most folks don't live to tell the story afterwards. If you both can't afford 10-20K a month each in Nursing home costs for any period of time you need to at least get a look over of your situation from an Elder Care Attorney and then an accountant about tax implications of any adjustments. My Mom had a Long Term Care insurance policy that I am still fighting to get paid out. And this isn't like where to move to or such, when the need comes it will be immediate and it will be chaos if you both need care at the same time. This is very different than basic health care insurance, and it is similar to how health insurance doesn't cover dental care. I only became aware of this at first as I work in a field with lots of clients on disability and the rules are similar but different enough to not be easy to understand at first.

[3Hotdogs]

12. I know the value of an elder law attorney. When my mom was going south, we paid 2,500 for documents.

It probably saved us over 150K using his plan, as opposed to what we were planning to do.