GIVE THE KIDS THE HOME? NOT A GOOD IDEA

Many seniors come to us for advice as they see their friends going into long-term custodial facilities and spending their life savings for care. They want to leave their estate to their children. Frequently, they have heard on the street that they should give their house to the kids now so it won’t count for Medicaid. WRONG! –generally.
In husband and wife situations, the marital home has protections that are lost if you give it to children. The structure of Medicaid is to protect a “community spouse” by not taking the home as long as the community spouse owns and lives there. In addition, the marital home is an investment that can be improved, using liquid assets that otherwise might be used for care of an institutionalized spouse and, with the step-up in basis on the death of the community spouse, results in a potentially greater transfer of value to the surviving children.
Another consideration is that transfer to the kids exposes the house to their creditors or their devious, unfaithful spouse in a divorce. You could end up on the street. There are several techniques that accomplish the goal of saving assets for children that don’t expose you to such risk.
It’s complicated. Come talk to us.