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My mother-in-law wants to transfer the title of her house into my wife and sister-in-laws names. Does this cause any problems 'tax-wise' down the road? She will continue to make pay all taxes. She just wants to take the house out of her name.

There are a number of issues, taxes and otherwise:
1.) She probably will need to file a gift tax return
It doesn't mean that any taxes are immediately due
2.) As previously noted, it may cause problems with qualifying for Medicare
3.) If the house has significantly appreciated, as a gift the cost basis remains the same. If inherited, it will receive a stepped up basis.
4.) The house is now owned by the daughters, and any problems they have could endanger ownership of the house: divorce, death, lawsuits, and financial issues.
5.) The sisters maybe on good terms currently, but things happen.

Your MIL should consult an attorney for estate planning. Fear of estate taxes can trigger really stupid actions that can't be undone.
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