Deed & Property Transfer Lawyers Serving Western Pennsylvania
Property and deed transfers are a critical part of the estate planning process. At Heritage Elder Law & Estate Planning, our office handles hundreds of property transfers a year. We have the skill and experience necessary to guide you through even the most complex parts of estate planning, including transferring property. Contact our office today to learn how our property and deed transfer attorneys can help.
How important are Deeds and Property Transfers when preparing an estate plan?
A very common type of property transfer is to deed the house to a child. Often families come in and say, “I have heard that I need to give my house to my children.” It’s true that there is a benefit in planning for long-term care by dissipating assets or giving assets away. By doing this it will start the five-year look-back period of time to start. At the end of this five-year period, you could be eligible for medical assistance. Please refer to the asset protection and Medicaid sections of our website to learn more.
When planning for long-term care, we often talk about preparing for a skilled nursing facility. However, some of our families never end up in skilled nursing. Should a loved one need to pay for personal care, under Pennsylvania law the only way to pay is privately out-of-pocket or with long-term care insurance, should you be fortunate enough to qualify or afford it.
Transferring a House to a Child
Unfortunately, the house is often the last asset remaining as people approach their final years of life. The value of the house can become the only asset available to ensure a good quality of life or maintain a decent standard of living should a loved one not be in a nursing home and wants to be taken care of at home. All too often, when a house is transferred to a child, it is done so inappropriately. Once that transfer has occurred, there is no way to forcibly have the transfer come back. We have seen many cases where a house has been transferred to a child or another family member and the house is either modified or sold out from underneath the person who transferred the house, with no regard to the person’s long-term care needs.
We have a common saying here at Heritage: “Never give up the ship.” It is uncommon for us to recommend a planning strategy where we give assets directly and outright, especially when it involves real estate to multiple children. In very rare cases, it is appropriate to transfer a house outright to a child. However, that is beyond the scope of the explanation in this section. Again, our general advice is to never give up the ship just in case you or your loved ones have personal care needs later in life.
How can a deed transfer in Pennsylvania?
We routinely do transfers of deeds for real estate sales or transfers between family members. However, there are multiple ways a deed can be transferred. By default, in the Commonwealth of Pennsylvania, when you deed a piece of property to a husband and wife, it is deeded jointly. If one spouse passes away, the surviving spouse will own the entire property. This is sometimes referred to as rights of survivorship or by a tenancy of the entireties. However, when you deed property jointly to anyone but a husband and wife, you have what is referred to as a tenancy in common. A tenancy in common means that there are two owners and they own an equal interest in the property, but it’s not clearly defined as to which part of the property you own. This becomes problematic when we have multiple owners on parcels of land or a wooded acreage. A farm is another common piece of property where these points become difficult to work out. For example, who owns the northern half of the pasture or the southern part of the farm that has the creek and the low lying hunting grounds? Sometimes it is hard to determine, and although when the property was transferred the family members were on the right page, when you pass away there is no surviving right to the other joint owner.
Therefore, if I own a piece of property with my brother and I pass away, my wife now owns my portion. My wife and brother may have a different understanding of what should be happening to that property or what it might be worth. In our experience at Heritage, this is a common reason why properties end up in tax sale: There are multiple owners with no defined goal or strategy that have to manage the property and pay for the taxes. Due to the frustration, everyone just throws their hands in the air and nobody pays the taxes, which results in the property going back to the government.
There are multiple ways to prevent this scenario, often by creating a contract or choosing another avenue of ownership. Whatever the solution, it is best to deal with the issues before we lose control of the situation and bring in parties that may not be able to agree in the future.
Contact Heritage Elder Law & Estate Planning for your deed transfer needs
Be careful not to give up the ship and avoid creating a family problem with real estate by not understanding the implications and the outcomes of a deed transfer. These are just two or three high-level concepts of property transfer, but there are many other ways you can also transfer a property. Each one has its pros and cons. To learn more about property and deed transfers for your particular situation, contact Heritage Elder Law & Estate Planning, LLC today.