At first glance, it may seem like an easy choice -- transfer the deed of your home to your children and preserve the family home. However, many potential legal and financial problems can arise from such a transaction. Therefore, it is in your best interest to take necessary steps to become completely knowledgeable before signing over the title.
A Complicated Process
Research your state's laws. In some states, owning a home may affect Medicaid benefits. Though the laws vary slightly by state, most require a poverty-level income or less, and less than $1,700 to $2,000 in total assets, including the home, for Medicaid eligibility. Some states will charge an inheritance tax, and others may charge a gift tax.
Research different options. Parents have different ways to transfer the title of their home to their children. They can "gift" it to them, let the children inherit the home after their death, or, if the move is purely financial, sell the home and let the children inherit the profits.
Consult with an estate planner and perhaps an elder-care lawyer. Selling or gifting a house carry many tax implications. Hire a professional who to explain all of the legal ramifications of such a process, including the taxes you or your children must pay, and how this will affect your eligibility for Medicaid.
Sign the deed. The actual transaction requires nothing more than a signature from both the gifter (the parents) and the giftee (the child) and recording the deed. You also will need to sign an affidavit asserting that the transaction is a transfer.
Items you will need
- Lawyer or estate planner
- Deed to your home
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