Forensic, General & Medical
Expert Witnesses

Expert Witness: Legal Complications in Transfers of Ownership

     By HG.org

Sometimes a person may wish to transfer real estate, whether residential or commercial, to another person. However, when conducting these transactions, legal complications may arise, necessitating the use of an expert witness to explain potential legal complications.
Income Taxes

In some situations, there are tax implications that may arise due to the sale of property. When a person transfers a property out of his or her own name that was a principal residence, the person may become disqualified for a tax break that he or she otherwise would have enjoyed. A seller may be required to pay capital gains taxes on the profit that he or she acquired from the sale of the property.

Financial Problems

In some instances, a person may want to transfer property as a way of maintaining his or her legacy by passing property on to the next generation or a trusted partner. However, once this transfer is made, the owner may relinquish all of his or her rights to the property. However, the grantee may have financial problems that cause him or her to quickly lose the property. For example, if he or she has creditors, the creditor may place a lien on the property. The grantee may have to declare bankruptcy and liquidate the property. A grantee may get divorced and the property may become part of the divorce settlement or award. In these ways, grantors may see that their intention regarding the property is not fulfilled.

Benefit Programs

Some benefit programs may be impacted upon the sale or transfer of a property. For example, Medicaid recipients may find that their application for nursing home care is rejected because there has been a transfer for less than fair market value within the last five years. Medicaid is a means-based medical assistance program, meaning that a person must meet the eligibility criteria based on assets and income. Many individuals realize that they will not be able to have access or use of real property once in a nursing home. However, they may not want to give up their property rights or ability to transfer property to their loved ones. They may want to transfer these assets before going into a nursing home.

Without having a rule that limits individuals’ ability to transfer their assets once it was evidence that they will need nursing home care, there would be a great incentive for people to make valuable transfers. For these reasons, Medicaid has a look-back rule in which it creates a penalty for making transfers or gifts of property that are made in order to qualify people for Medicaid benefits. The look-back period is five years. A penalty period is calculated that figures the amount of months and days during which benefits would not be available to the applicant to receive nursing home assistance.

Deed Issues

Legal issues can arise when there are mistakes made in the deed. If a deed is not properly drafted, a seller may include extra land in the deed that was never intended to be included, or a buyer may lose a portion of property or have an easement of property that allows the seller or others access to the property that he or she never intended on having. Another possible issue that can arise is that the deed may not be properly recorded. This can have tax implications as well as affecting who is technically considered the legal owner of the property.

Will Issues

Another potential issue that can arise regarding transfers of property have to do with the classification of property and how it is transferred. When a person has joint tenancy, his or her property transfers upon his or her death to the person named in the deed. Even if his or her will names someone else as the beneficiary, the deed controls. Individuals who have tenancy by the entirety have the deed passed to their spouse.

Title Issues

During a sale of property, the chain of title will be inspected. Problems can occur during this phase if issues with the title are discovered, such as a lien being placed on the property or a transfer that is not recorded properly.

Legal Assistance

When legal complications arise involving transfers of ownership, an expert witness may be necessary to explain why the problem arose and who is liable for the problem. He or she may explain the nature of the issue and the legal implications. He or she may also discuss the amount of damages that have arisen because of the legal mistake.

Copyright HG.org


While every effort has been made to ensure the accuracy of this publication, it is not intended to provide legal advice as individual situations will differ and should be discussed with an expert and/or lawyer.

Find an Expert Witness