Attorney Thomas B. Burton discusses some of the pitfalls to transferring your home to your children during your lifetime. Attorney Burton also discusses why this Medicaid planning strategy often leads to unintended consequences.
Transcript of Video: Why You Shouldn’t Deed Your Home to Your Children
Today's question why shouldn't I
gift my home to my children via deed and
continue living in it for Medicaid
planning purposes I run across this
scenario many times while it looks quick
and easy to execute a deed and give your
home to your children with the idea that
you can remain living in it it often
leads to unintended consequences and I
tend to advise clients to avoid doing
this. Why? Once you execute that deed
your children technically own the home
that means you live there at their mercy
if one of the children should encounter
creditor problems a creditor could
attach to your home let's say it's a
family home you spent your life working
to pay off completely now a child
perhaps through no fault of his own was
in an accident and a creditor puts a
lien on your home that may affect your
ability to stay in the home for the rest
of your life even if your children are
willing another reason is you give up
control of the home while you are the
owner you control what happens with it
if your children take over they have to
agree and manage it and what may be in
their best interest is not always in
your best interests even if they're good
people
the other reason is there's a good way
to do this without using the deed
transfer and that's by using a trust
where you retain the power to live in
the home but give the home ultimately to
your intended beneficiaries which would
be your children for this reason I
advocate trust planning over the deed
method while the deed can seem quick and
easy and cheap it's often too good to be
true and leads to bigger problems later
so consider a trust when you're trying
to leave your home or other special
asset to your children over the deed
Great question and thank you for asking!
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Transcript and captions provided for ease of access for the hearing impaired.
For questions about this topic, or to suggest a topic for a future blog post, please contact my office.