Question: Should I transfer my home to my kids to protect it if I should need nursing home care?
Answer: The correct answer is “It depends”. It depends on your unique family, health, and financial situation. Tax consequences also have to be considered. In the event you need long-term care, there is a five year look-back period that applies to gifts (transfers of assets without consideration). Thus, if you are faced with a chronic or catastrophic illness within five years after you transfer the home to your children; such transfer may impact your ability to obtain Medicaid (Title 19) benefits. This is a very complicated area of the law and requires careful consideration.
If it makes sense to transfer the home to your children, there are several ways to structure the transfer. The first is an outright gift to your children. This is generally not advisable for tax reasons and asset protection purposes. The second is by completing the transfer but retaining a life estate. While generally superior to an outright gift, this is also not without problems. However, the retained life estate does give you some legal control over the property and also preserves some tax benefits associated with inherited property versus gifted property. The third is a transfer of your home to an irrevocable trust. This is usually the preferred method of protecting the home as it balances tax benefits with asset protection issues and also protects the home from your children’s creditors or in the event they should predecease you.
As you can see, the transfer of your home is something that requires careful consideration and sound legal counsel.
If you need help with this or other elder care legal matters and need to locate an Elder Law Attorney near you, go to: ElderCareMatters.com – America’s National Directory of Elder Care / Senior Care Resources for Families.
Paul T. Czepiga, Esq., CELA
An ElderCare Matters Partner
If you need answers to your elder care questions, send your questions to us at:
Answers are provided by our ElderCare Matters Partners, some of America's TOP Elder Care Professionals who have years of experience in helping families plan for and deal with a wide range of Elder Care / Senior Care Services.
All Q&A's are posted on the homepage of ElderCareMatters.com
If you help familes plan for or deal with elder care matters, then you owe it to yourself and to families across America to become a professional member of the National ElderCare Matters Alliance and to be listed on the many Elder Care / Senior Care Directories that are sponsored by this National Alliance of Elder Care Professionals.
For additional information about professional membership in the National ElderCare Matters Alliance, (including the many benefits of becoming one of our ElderCare Matters Partners) and to download an Application for your Basic, Premium or Partner Membership in the National ElderCare Matters Alliance, visit: ElderCare Matters Alliance.