Avoided Nearly $60,000 in Capital Gains Taxes After Incorrect Property Transfer

The McCoy Law Firm, LLC successfully corrected a huge mistake that would have resulted in a client paying almost $60,000 in capital gains tax. A widower was concerned that if he needed nursing home care that his home would be lost. Widower went to see a general practice attorney for advice. General practice attorney, not understanding the tax implications, prepared a quit claim deed transferring the residence from the widower to his only son to keep it "safe" from the nursing home. The following week, the widower had a meeting with his financial planner and explained what he had done to "protect" his home. The financial planner, who previously was involved with a similar situation with a negative outcome, suggested that the widower immediately seek advice from the McCoy Law Firm, LLC. The McCoy Law Firm, LLC created a trust that protected the home while simultaneously preserving the capital gains exemptions that were lost when the widower quit claimed the house to his son. The widower, who fortunately never needed nursing home care, died four years later. At the time of the widower's death, his home had increased in value almost $300,000 over the amount of the original purchase price and improvements. Because the McCoy Law Firm, LLC corrected the ill advised quit claim deed and included carefully drafted language in the trust, the son sold the home and paid no capital gains tax, resulting in a savings of approximately $60,000.