Should Parents Transfer Their Home to Their Son?
- August 27th, 2013
Perhaps, but everyone may be better off using a trust. As you suggest, a transfer of the home to the son will cause five years of ineligibility for Medicaid benefits for both parents. Depending on their health and other resources, this may or may not be a risk they should take. A transfer outright to the son has several drawbacks, including the following: The house would then be subject to any claim should the son be sued or divorced or pass away. In addition, when the son sold the house he would have to pay tax on the capital gains which would be determined based on the difference between the parents' purchase price, plus the value of improvements to property, and the son's selling price. These risks can be prevented by transferring the house to a properly-drafted irrevocable trust. The trust would protect the house for the parents (and the son and his family as well) and bring the son a "step-up" in basis upon the parents' death, reducing or eliminating any tax on capital gain. These issues are complicated and the right answer depends on everyone's circumstances. These decisions must be made with the assistance of a qualified elder law attorney.
Local Elder Law Attorneys in Ashburn, VA
Felinton Elder Law & Estate Planning Centers
Mindy Felinton concentrates in the areas of Medicaid planning, Veterans' Benefits, asset protection, nursing home planning, elder law, wills, estate planning, trusts, living wills, powers of attorney, probate administration and trust administration and began her legal career 30 years ago as an Assistant State Attorney...
Hammond and Associates, LLC, Elder Law, Estate Planning, Wills, Trusts, Probate
For Jeffrey Hammond, the practice of Elder Law is personal. Jeff’s many years of experience in law and in business did not prepare him for the crisis he faced in 2005 and 2006 when his father suffered a stroke and both of his parents suffered from dementia and other medical problems. At that time, Jeff began an i...
Hale Ball Carlson Baumgartner Murphy PLC
Jean Galloway Ball is certified in Elder Law by the National Elder Law Foundation. She is a 1977 honors graduate of the National Law Center, George Washington University, and she did her undergraduate work at the University of California at Berkeley, graduating Phi Beta Kappa in 1971. She is admitted to practice in Vir...