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
Needham Mitnick & Pollack, PLC
Judith Mtinick is well known for acting as a guardian, conservator, trustee or agent on behalf of clients or by court appointment. This experience gives her a wide perspective and extensive practical knowledge that she uses when advising clients in drafting their planning documents. Her experience, as a court appointed...
Hale Ball Carlson Baumgartner Murphy PLC
Attorney Samantha Simmons Fredieu is an associate at Hale Ball. Ms. Fredieu graduated magna cum laude from Vermont Law School where she was the symposium editor on the Vermont Law Review, a production editor on the Vermont Journal of Environmental Law, and a member of the Moot Court Advisory Board. She has clerked for...
Margaret A. O'Reilly, PC
Margaret A. O’Reilly is an estate planning and elder law attorney with over thirty-five years of legal experience. Attorney O’Reilly graduated from Duke University with a degree in psychology, and received her law degree from Northeastern University School of Law in Boston, Massachusetts. For over 15 y...