It often starts with the kids. They are worried about their aging parents and what will happen to the family house. Will it be lost to Medicaid should the parents need nursing home care or subject to estate taxes?
The families’ well-intentioned solution: Place the deed in the children’s names. However, the parents don’t necessarily want to do that. They often relent and in doing so make the huge mistake of transferring their home. The parents then end up losing control of their assets and possibly creating a future of tax bills for their children (Under new Medicaid law the parents may be making themselves ineligible for five years for Medicaid benefits.)
As Connecticut’s population continues to age, more parents are facing what to do with their homes. Often the home is the largest asset most families have.
Two primary reasons parents transfer assets is to avoid having to go through the probate process and to protect the home from being seized to pay for nursing home care. A single person (widow or widower) is only eligible for Medicaid benefits if his or her total assets total less than $1,600, plus prepaid funeral arrangements.
While some parents mistakenly transfer their homes outright, many will do nothing at all until it is too late. Others decide to transfer their home without considering professional advice. The result is that seniors come to our office after already having done things wrong.
The time to consider a transfer of assets or real estate is often not a factor of age, it is health. Someone who is 50 and has a debilitating disease – probably requiring future nursing home care – should protect their home early.
Healthy individuals should start gathering information by retirement age. (55 – 65 years of age.)
Even if you wait too long, there are still ways to save some assets.
Obviously you can protect more by planning early before something happens.
Daniel O. Tully, Esq.