In this Elder Law Minute, Wes Coulson shares some insights on why deeding your residence to your children may not be the best way to protect your house if you later need nursing home care.
Think Twice Before Deeding Your Residence to Your Children
Hi, I’m Wes Coulson and this is your Elder Law Minute. Sometimes, older people who are looking toward protecting their house, if they later need nursing home care, think that a good way of doing that is just to deed the house over to their children. It’s really not a good idea for several reasons.
First of all, if it’s done within five years before you would need nursing home care, it’s a transfer that can cause a delay in Medicaid eligibility. If you live in Illinois, you have exemptions on your property taxes for owner occupied property and senior occupied property. Unless your children are moving in with you, or over age 65, those exceptions will go away, your property tax bill will go up. And Last, but certainly not least, if you sell your own residence, its exempt from capital gains tax, but if you deed it over to your children and they sell it, they may be looking a substantial capital gains tax liability. Thanks
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