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I would not do it, but confer with a CPA to see how such a transaction would affect you financially.
Do you currently live in the house, or live elsewhere?
Ok, let's say your Mom puts you on the Deed with/without you paying off the mortgage. When the time comes to sell the house, the accounting works this way.... the tax bases is the price your Mom had paid for the house when she bought it. If Mom bought the house many decades ago, you could have hefty Property Gains tax to pay. Less tax if you had lived in the house for a certain length of time after your name was placed on the Deed.
If your name is not on the Deed and you didn't put a dime into the mortgage, and you inherit the house, the tax bases would be the market value of the house on the day you had inherited the house.
What is the market value of the house? I hope it is a way lot more than the balance on the mortgage. I wouldn't want to see you pay off a mortgage for a house that is "under water" meaning the loan is worth more than the house.
As other writers had answered on this thread, best to contact an Elder Law Attorney to find out what is the best route to take.
See a lawyer with your Mom in the new year. Wishing you the best.
If you want to figure out the best way to support your mom and her finances in her old age, consult with a certified Eldercare attorney (www.nelf.org) and proceed from there.
Do not rely on what "you've heard" or "friends tell us that...".
I suggest at her age she sell her house at Market Value (Medicaid requirement) and use the proceeds to pay for a nice Assisted Living.
The taxes and upkeep she is now paying and SS can go to offset the cost of the AL.
So if the funds in your 401k are averaging 10% gain per year and you need to pay 22-24% income taxes on withdrawal, having a 3% mortgage is actually a good thing.
My guess is that you wouldn’t ‘lose your investment’ if the house has been transferred into your name legally, but your mother might have to pay privately until she has spent the amount of the ‘gift’. If she has no money, then you would be expected to pay for her care, up to the amount of the ‘gift’.
This is my best guess, based on what I have learned about Medicaid from the site (ie not as a retired lawyer in a different jurisdiction). It might help you to get your head around options before you get your own legal advice. You may have to see a lawyer anyway to transfer the house legally, so definitely check with the lawyer before you go further into the idea.
Social contracts & mixing money with family give me the heebie geebies.
I agree with 97, get legaled up.