Q: Some years ago, my aunt put her house in my father's name. She recently died and my father now owns the house.
He wants to sell the house to my son (his grandson). We are being told that the house must be sold at "fair market value". Can he not sell the house at whatever price he chooses?
A: Provided that what you stated is entirely accurate, he may sell the real estate to whomever he wishes and for whatever price he wishes to sell it for.
While I think Mr. Gallo's answer is correct based on the question as phrased, I sense a Medicaid look-back issue. Whether such an issue exists depends on whether your aunt received long-term care benefits through Medicaid, which is not mentioned in your question. When a Medicaid recipient receives such benefits, the government will "look-back" up to five years to see if the recipient transferred any assets (especially real estate) without receiving "fair market value" in order to meet the needs-based qualification for such benefits. I'm not sure if there is such a problem based on how your question is phrased.
A simple way of gaining clarification is to ask whoever told you that the house must be sold at "fair market value" why. When you find out why they are saying that, do not assume that they are necessarily correct. They may not know all the facts such as the fact that your aunt transferred full title to your father and that she did that years ago. If it was more than five years before your aunt applied for Medicaid, if she did, it would fall outside the look-back period.
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