We are planning to buy a home near our children. Is there a way to put it in our children's name without a tax burden on them? This is because we could end up in a nursing home and the state takes it.
2007-03-01 05:16:06 · 6 answers · asked by richard w 1 in Business & Finance ➔ Taxes ➔ United States
You really should speak to an estate planning attorney before doing anything like this. They will be able to tell you exactly what options you have so that you don't get into a mess with the IRS or with Medicaid (which you will likely need to pay for nursing home care). I would NOT go to Joe Schmoe lawyer who does wills on the side. Find a law firm/attorney who specializes in this area (estate planning/elder law). One place to check is NAELA - The National Academy of Elder Law Attorneys http://www.naela.com/ They will have a list of members in your area. You can also try www.martindale.com or www.findlaw.com. But NAELA would be my first suggestion.
2007-03-01 05:27:23 · answer #1 · answered by Angela M 2 · 1⤊ 0⤋
Consider the possibility that your kids may sell your home and spend the money the way they want to. You will lose control if you do this. Suggest you consult a probate and estate planning lawyer for suggestion in the state you are moving to. There would be no tax burden to your children except for the property taxes which you would pay, right? If you have a mortgage on the property your kids would get the tax deduction for taxes and interest that You pay.
2007-03-01 05:24:29 · answer #2 · answered by Larry62 5 · 0⤊ 0⤋
Any assets that you transfer within 5 years of your application for assistance from public funds for long term care or nursing home care can be taken to pay for your care. It really doesn't matter how you characterize the transfer; if you need care provided through public funds it will be denied until the funds are recoverd and used for your care.
If you were to purchase a home and put it in your children's name there would be potential Gift Tax consequences as well. While you might be able to avoid the Gift Tax by using your lifetime exclusion amount, this would leave a CLEAR audit trail of where the funds that you transferred went. If you were to apply for assistance from public funds, you'd need to liquidate the home to pay for your care first.
If you are confident that you will not possibly need to rely on public funds for aid for at least 5 years, you only will have to deal with the Gift Tax consequences. You also need to keep in mind that if you put it in your children's names, you will not have any legal claim to the property. If you ran into problems with your children, you could find yourselves without a home.
A better way would be to purchase the home and leave it to your children in your will. If you wind up needing to liquidate it to pay for your care, so be it. If you don't, then it will pass to your kids after you die. Another option would be to transfer it to them with a life estate that would guarantee you a home until you died. That won't protect it if you need assistance from public funds, but at least you'll have a home until then AND an "arms length" transaction that won't look suspicious.
2007-03-01 06:06:33 · answer #3 · answered by Bostonian In MO 7 · 1⤊ 0⤋
Not that I know of. We are not as old yet, but when we bought our home we put it in our children's name for some of these very reasons, looking ahead toward the future. We pay the taxes ourselves in this kind of case.
2007-03-01 05:23:15 · answer #4 · answered by Laura S 4 · 0⤊ 1⤋
I can help you. You need to place the home in a trust account, therefore it belongs to the family trust. Trust accounts will protect real estate assets and enable you to build wealth with tax advantages.
Please email for more detailed information.
realtortx@yahoo.com
The brokerage I work for is Nation wide we provide services for real estate, mortgage, financial, insurance planning. We are here to help!
2007-03-01 05:26:01 · answer #5 · answered by realtortx 1 · 0⤊ 3⤋
Ask a realtor about deeding it to them, laws vary from state to state.
2007-03-01 05:20:26 · answer #6 · answered by smartypants909 7 · 0⤊ 3⤋