When Grandpa Does Not Put the Plan in Writing
Jan 08, 2021OUTCOME: Grandson has to purchase the farm land that was intended as his inheritance.
Grandpa and grandson were tight; grandson helping with the farm. Grandma died. Grandpa remarried a nice lady. Grandpa put farm in joint tenancy with step-grandma with instructions to give the farm to ... grandson when she died. The farm house burned down. Grandma has dementia issues and moved to town with daughter and deeded the farm to grandson. (never mind the capital gains tax issue that causes). Two years later, grandma is in nursing home and out of cash. Transfer to grandson falls within the 5 year lookback rule for gifting. Grandson has to either purchase the farm from grandma or give it back. This could have been totally avoided if Grandpa has put the land in a revocable living trust and named grandson the beneficiary of the farm. He could have left a right to occupy the residence to his spouse, which would have terminated when the house burned down and had no effect on her ability to obtain Medicaid.
