Should my mother put my sister and I on the deed to her home?

Q: My mother thinks that her name should be taken off the deed to her home and my sister and I should be put on the deed to avoid complications when my mother ultimately goes into a nursing home or dies. First, we heard this is an expensive process. Is that true? Secondly, is it advisable?

A: To answer your first question about expense, this is not an expensive process in your case. Assuming your mother is the only name on the deed or she is on the deed with your deceased father, this transaction should be exempt from PA real estate transfer tax as it is a “family transfer”. If it were not exempt, such as the case with most real estate sales, or transfers to non-family members, the transfer tax is at least 2% of the sales price or market value of the realty. For a $100,000.00 home, this could be a $2,000.00 transfer tax. In your case, the only costs to you would be the attorney fee to draft the deed (usually $100.00 to $300.00) and the filing fee paid to the Department of Real Estate, which is $150.00 in Allegheny County. Whether this transfer is advisable in your situation, is a much bigger question. There are advantages and disadvantages to both parties of the transfer, you and your sister, as well as your mother. You should consult with an attorney before changing names on a deed to make sure you are well aware of all the issues including real estate tax discounts, inheritance tax, capital gains and PA Medicaid eligibility and liens. In summary, this transfer could exclude her from Medicaid eligibility if she needs to apply in the next five years, by transferring to you she may lose her senior citizen and Homestead Act real estate tax exclusions and discounts. You and your sister may face a capital gains tax when you sell this house. Such transfer will avoid inheritance tax if mom lives one year past the date of transfer, however, is it really worth it to avoid a tax rate of only 4.5%? Should mom transfer to mom and you two siblings as joint tenants instead? Those are just a few things you will need to discuss with an attorney before doing this.