Best Method for Living Parents to Transfer Real Estate to Their Children? - Tax-free if Possible

[G-Man]

My son and his wife made an offer on a house that belonged to a family friend, a widow. That family discovered that the widow, then senile, put the name of her children on the title. In the interim one of the children died with a surviving spouse. It was a mess to untangle the title.

Don't put the children on the title. Prepare a living trust and put the title of the house in the living trust.

That was going to be my next question as it relates to retitling and other documents that need to change to reflect that the property is in the trust name. For example, do you need to call the insurance company to get the insurance for property changed to the trust name?

 

[ncbill]

There are probably schemes to do that but I think it is unethical. I'm not going to help you help your friends transfer their long term care costs to me and other taxpayers for the benefit of their kids.

Sell the house and use the proceeds to pay for your own long term care. If it ends up that they run out of money, then they can put thei hand out.

I'm still sorry I didn't transfer mom's house to my younger brother, but I didn't know about the below at the time.

That would have been an exempt transfer under Medicaid rules because he had lived with her & served as her caregiver for at least 2 years.

In the end mom died just as she ran out of money, but had I known about the above he at least would have had the option of staying there instead of a series of crappy apartments.