Asset Transfers Through Other Means

Asset Transfers Through Other Means 

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Please contact Michel J. DeBottis to determine your best options for transferring assets to your loved ones.
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Asset Transfers Through Other Means

It is possible to transfer assets by gifts made during your lifetime and by transfer on death designations on bank accounts and other investments. Assets may be transferred to surviving owners of jointly owned accounts. Real estate may be transferred entirely, or while retaining a life use known as a “life estate.” Though these methods of transferring assets are simple to execute, each of these approaches to transfer ownership may present significant disadvantages that should be considered. Some of the issues that should be considered include: 
  • Gift tax and income tax ramifications should be considered prior to making gifts of valuable property. Real property and other assets which are distributed upon the termination of a trust or through a proceeding in the Surrogate's Court are valued for income tax purposes as of your date of death. Assets which are given during your lifetime are valued for income tax purposes based on what you paid for those assets.

  • Transfers of assets which have appreciated in value, such as investments, your residence or other real estate, may subject the recipient to significantly greater income tax upon the sale of those assets than would be imposed if the assets are transferred through your estate or a trust.
  • Assets transferred to your children or other beneficiaries during your lifetime may be lost to the recipients' judgment creditors, bankruptcy, divorce, or as the result of other personal problems.

  • When you transfer title to an asset, you lose your legal right to the benefit of the asset, such as any income your financial assets generate, or in the case of your residence, the undisputed right to live in it, mortgage it as a means to obtain low cost loans, reduce school taxes through STAR exemptions, etc.

  • A transfer of your real estate for less than market value or as a gift, which if made within sixty months prior to your application for Medicaid, will trigger a penalty period which impairs your eligibility to receive Medicaid.

  • Life estates assure you the right to continue to reside in your property and to retain favorable property tax treatment, but the retained life estate has a value that is considered to be an asset for Medicaid eligibility purposes. Also, by gifting your property subject to a life estate, the owner of the property can incur significant income tax burdens when the premises are later sold by the owner.
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