Unfortunately your simple question will require an in-depth conversation with an estate planning attorney. You should not attempt this on your own without consulting an attorney. You may trigger serious unintended consequences if jump into this without understanding all of the risks and complexities involved.
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I agree with my colleagues. These issues require a very close look at the individual's finances and strategic planning to achieve their objectives. There is no one way that is best for everybody and there hasn't been nearly enough information provided to determine an answer to your question. Feel free to contact me if you would like to thoroughly discuss the matter.
I am sorry to hear of your situation. I would need more information to answer your question. I strongly suggest that you contact a local attorney to discuss your options. Since many attorneys, including my firm, offer free consultations, you have nothing to lose and everything to gain by contacting one of us. There may be several options available to you. We welcome your call. Best of luck.
Martinous Law Associates, 401.277.2900. Mr Martinous is licensed to practice law in RI, MA and FL. The laws of your jurisdiction may differ. This answer is for informational purposes only and is not to be considered legal advice. This answer in no way constitutes an attorney client relationship.
Once your give you their house you also get their tax basis and unless you live in the house for two out of the five years prior to selling it, you get a capital gains tax hit, too. Since the house will be yours, you or a creditor who gets a judgment against you, can evict your parents. As a practical matter, we only transfer the houses of our clients to their kids in limited situations and rarely without a lease-back agreement allowing them to continue to reside in the home. Your parents should consult with a seasoned elder law attorney experienced in Medicaid planning for advice on how to proceed.
Sorry to hear your parents are ailing. I agree with my colleagues that you should not take any steps toward transferring the home without first consulting an elder law attorney. If your parents don't end up going into a nursing home, an outright transfer could have very serious consequences for them, for example, if their children get into debt or go through a divorce. If they do need to go into a nursing home at some point, the law on asset transfer prior to applying for Medicaid benefits is very complicated, and an attorney must help you navigate that maze. Hope all turns out well for your parents.
Is your concern that your parents could lose their home to Medicaid if they don't transfer ownership? The Medicaid rules and regulations are quite complex and vary some from state to state. So it is in everyone's best interest to talk with an elder lawyer about the ramifications of such a transfer in your state.
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It sounds like you and your family are in a crisis situation here. You are trying to plan for your parents' placement, care, support and what could be astronomic long term care costs. You need to stop, breath and make an appointment with an Elder Law attorney experienced in Medicaid planning. Whatever you do, DO NOT TRY THIS AT HOME!!! This is an incredibly complex area of law that differs just a bit in virtually every state. An experienced Medicaid planning attorney can review your particular situation in depth; advise you regarding Medicaid planning options as well as related tax issues; point you to resources to assist you with your parents' placement and long term care plans; and possibly help to preserve some of your parents' assets from exposure to long term care costs (which can easily reach $90,000 or more per year here in Colorado). On the other hand, trying to "do-it-yourself" could result in unnecessary loss of assets, deprivation of a source for payment for necessary care, and worse. Please see an Elder Law attorney in your state right away.
Nothing in this posting is intended to, or does it create an attorney-client relationship. Further, it is NOT legal advice, it is for informational purposes only. If you wish advice specific to your situation, you may contact me independently and ask for a consultation.
Protecting assets from Medicaid requires a specialist. To get the most protection, you should start the process at least 5 years before the person needs long term care.
I am giving you general information about the law. To give you legal advice I would first have to learn more about the facts and circumstances of your particular situation. (401) 383-7550 or email@example.com I am not your attorney and I am not giving legal advice. The Rhode Island Supreme Court licenses all lawyers in the general practice of law. The court does not license or certify any lawyer as an expert or specialist in any particular field of practice.